ENVIRONMENT DEPARTMENT WORK IN PROGRESS TOWARD ENVIRONMENTALLY AND SOCIALLY SUS A DE EOP T LIN' 20455 ECONOMIC ANALYSIS OF INDONESIAN CORAL REEFS Herman Cesar December 1996 ENVIRONMENTALLY SUSTAINABLE DEVELOPMENT VICE PRESIDENCY THE WORLD aANK Contents Forew ord ............................................................................................................................................. iv A cknow ledgm ents..............................................................................................................................v ExecutiveSum m ary ........................................................................................................................... 1 1. Introduction.............................................................................................................................. 11 2. Coral Reefs: Their Functions and Econom ic Value ...........................................................13 2.1 Introduction .................................................................................................................13 2.2 Fishery...........................................................................................................................14 2.3 Tourism ......................................................................................................................... 20 2.4 Coastal Protection ....................................................................................................... 21 2.5 Summary of Economic Values of Coral Reef Functions........................................23 3. Threats to Coral Reefs ............................................................................................................. 25 3.1 Introduction .................................................................................................................25 3.2 Poison Fishery..............................................................................................................26 3.3 Blast Fishing .................................................................................................................45 3.4 Coral M ining ................................................................................................................52 3.5 Sedim entation and Pollution.....................................................................................58 3.6 O verfishing................................................................................................................... 62 3.7 Conclusions of the Econom ic A nalysis.................................................................... 65 4. Coral Reef M anagem ent: A n Econom ic Perspective .............................................................66 Endnotes ............................................................................................................................................ 70 References .......................................................................................................................................... 78 Figures, Tables, and Annexes Economic Analysis of Indonesian Coral Reefs Figures Figure E-1: Temporal and Spatial Comparison of Maximum Depth of Living Coral Reef for 4 Islands in Jakarta Bay .........................................................1 Figure E-2: Net Present Value of Blast Fishing to Individuals and Associated Losses to Society per km of Reef.....................................................................................5 Figure E-3: The Relationship Between Live Coral Cover and Distance from Land .......6 Figure E-4: Yield of Trochus (Mother-of-Pearl) in Noloth (Central M aluku) in 1969-1992 per kg ............................................................................7 Figure 2.2.1: Yield-Effort Curve in Non-Destroyed Reef and Costs of Effort per km ' of Reef per year (in 1000 US$) ................................................................................17 Figure 2.2.2: Yield-Effort Curves and Cost Curve for Different Levels of Reef Degradation per km2 per year (in 1000 US$).......................................................19 Figure 3.2.1: Destruction of Coral Reefs and of its Functions due to Poison Fishing... 29 Figure 3.2.2: Annual Net Revenue and Value of Poison Fishing Compared to Net Revenue of Sustainable Live-Fishing ....................................................................36 Figure 3.2.3: Annual Net Income of Poison Fishermen and Sustainable Live-G rouper Fisherm en ................................................................................................37 Figure 3.2.4: Net Present Value of Poison Fishing to Individuals and Associated Losses to Society per km' of reefs in Large Scale Operations...............38 Figure 3.2.5: Annual Net Benefits of Fisheries With and Without Poison and H ook-and-Line A lternative............................................................................................40 Figure 3.2.6: Present Value of Net Revenue of Poison Fishery and Associated Losses to Society of Reef in Small Scale Operations...................................................43 Figure 3.3.1: Destruction of Coral Reefs and of its Functions Due to Blast Fish in g......................................................................................................................47 Figure 3.3.2: Net Present Value of Blast Fishing to Individuals and Associated Losses to Society per km of Reef...................................................................................51 Figure 3.3.3: Annual Net Income of Poison Fishermen, of Other Fishermen and O pportunity Cost of Labor .....................................................................................51 Figure 3.4.1: Destruction of Coral Reefs and of its Functions due to Coral Mining.....55 Figure 3.4.2: Net Annual Benefits from Fisheries With and Without Coral Mining ....56 Figure 3.4.3: Costs to Society and Benefits to Individuals from Mining ........................58 Figure 3.5.1: Temporal and Spatial Comparison of Maximum Depth of Living Coral Reef for 4 Islands in Jakarta Bay .........................................................................59 Figure 3.5.2: The Relationship Between Live Coral and Distance from Land...............60 Figure 3.6.1: Yield-Effort Curves and Cost Curve for Different Levels of Reef 2 D egradation per km per year ........................................................................................ 63 Figure 3.6.2: Yield of Trochus (Mother-of Pearl) in Noloth in 1969-1992 per kg...........64 Tables Table E-1: Total Net Benefits and Losses due to Threats of Coral Reefs..........................3 Table E-2: Costs and Benefits of All Remaining Indonesian Large Scale Poison, etc.....4 Table E-3: Net Benefits to Individuals: Amount per km and per Stakeholder..............7 Table E-4: Size of Economic Stake and Location of Stakeholder .......................................9 Table 2.1.1: Types of Values Corresponding to Different Functions of Coral Reefs.....14 ii Contents Table 2.2.1: Assumptions for Yields and Annual Income in Non-Destroyed Reefs.....18 Table 2.5.1: Net Present Loss to Society Due to Destruction of 1 km of Coral Reef O ver 25 Y ear .................................................................................................................... 24 Table 3.2.1: Wholesale Prices in Hong Kong in 1994.........................................................30 Table 3.2.2: Sales Prices of Wild-Caught Live Fish From Fishermen to Restaurant for Large and Small Scale Operations ......................................................33 Table 3.2.3: Costs and Benefits per Trip with 'Catcher' Boat...........................................34 Table 3.2.4: Costs and Benefits of All Remaining Indonesian Large Scale Poison Fishing and Their Sustainable Alternative .....................................................35 Table 3.2.5: Present Value of Costs and Benefits of Small Scale Operations of Poison Fishery and Sustainable Alternatives..........................................................42 Table 3.3.1: Present Value of Costs and Benefits of Blast Fishing and the Sustainable A lternative per k n ....................................................................................50 Table 3.4.1: Costs and Benefits of Coral Mining Per K .................................................57 Table 3.5.1: Temporal Comparison of Average Nutrient Concentration in the Jakarta Bay A rea...............................................................................................................59 Table 3.5.2: Present Value of Gross Revenue from Logging, Tourism and Fishery in Case of a Logging Ban versus Continued Logging ................................................61 Table 3.5.3: Value of Coastal Resources at Risk and Costs of Intervention....................61 Table 3.6.1: The Economics of Overfishing vis-a-vis Sustainable Fishing......................63 Table 3.7.1: Total Net Benefits and Losses Due to Threats of Coral Reefs .....................65 Table 4.1: Total Net Benefits and Losses due to Threats to Coral Reefs.........................67 Table 4.2: Net Benefits to Individuals: Total and Amount per Stakeholder.................68 Table 4.3: Size of Economic Stake and Location of Stakeholder......................................68 Appendices Appendix 1: Bibliography of Man-Made Coral Reef Destruction...................................87 Appendix 2: Assumptions for Yields, Costs, Income and Net Benefits, etc. in Reefs of V arious Q uality ............................................................................................92 Appendix 3: Destruction of Coral Reefs and Its Functions Due to Explosive Fishing per km2 ("Low " v ue)......................................................................................93 Appendix 4: Destruction of Coral Reefs and Its Functions Due to Explosive Fishing per km ("H igh" value) ....................................................................................94 Appendix 5: Destruction of Coral Reefs and Its Functions Due to Small Scale Poison Fishing per k5.........................................................................................95 Appendix 6: Destruction of Coral Reefs and Its Functions Due to Large Scale Poison Fishing ..................................................................................................................96 Appendix 7: Destruction of Coral Reefs and its Functions due to Coral Mining .........97 Foreword Coral reefs and their associated marine stems mainly from a failure to recognize life are one of the greatest natural the magnitude of costs to the present and treasures of Indonesia. Furthermore, the future economy resulting from reef richness and uniqueness of these degradation. ecosystems makes them a global asset. However, these reefs are increasingly The study is particularly useful since it being destroyed by a range of threats, integrates a social-welfare based including: poison fishing, blast fishing, economic analysis and a stakeholder sedimentation and pollution, overfishing analysis with a discussion on options for and tourism development. This has rational coral reef management. It fits prompted the Indonesian government to within the growing World Bank effort of set up a program for Coral Reef promoting sustainable use of the Rehabilitation and Management environment and natural resources (COREMAP). The World Bank is one of through integration of conservation and the key external institutions supporting development. Also, it supports the this effort, together with the Global International Coral Reef Initiative, Environment Facility and other donors. launched in 1995 by a partnership of Within this context, this study provides countries and international organizations insights and analytical approaches which including the World Bank. The study support the Government of Indonesia and assists the Government of Indonesia in the World Bank in their COREMAP the implementation of its Biodiversity undertakings. Action Plan which calls for conservation and sustainable utilization of biodiversity. This study analyses the often powerful economic forces created by short-term We are pleased that this report is being profits to individuals that lead to the published in a format which facilitates observed destructive patterns of coral reef wide dissemination as the issues it use. Measures for coral reef protection are discusses are of broad interest. We hope often presumed to conflict with economic that this study can help reverse the development, and are said to require a current trends and save coral reefs around sacrifice of economic growth. However, the globe from severe degradation. this study shows that this perception Marianne Haug Andrew Steer Director EA3 Director ENV iv Acknowledgments This study was carried out as an feedback. I would also like to thank in independent sector work in support of the particular Carl Gustaf Lundin, Nalin Bank's involvement in the proposed Coral Kishor, and Louise Scura for their Reef Rehabilitation and Management valuable insights. I am grateful to Luz Program (COREMAP) in Indonesia. Rivera and Elizabeth George for the editing. I would like to express my sincere appreciation for the support received The report benefited greatly from from the COREMAP preparation team, in extensive outside consultation with particular, Dr. Triono Soerdoro (National numerous scientists and others. I am Development Planning Board), Prof. M. especially grateful to Bob Johannes, Greg Kasim Moosa and Dr. Suharsono Hodgson, John McManus, Alan White, (National Institute of Sciences) and Dr. Mark Erdmann, Vaughan Pratt and Joop Victor Nikijuluw (Research Center for de Schutter for sharing their experience Marine Fisheries). and insights and giving their warm I would also like to thank those who support. helped in the preparation of this report at Finally, the paper has also benefited from the World Bank, in particular, Sofia comments received at the IUCN Bettencourt, the Bank task manager of Workshop on the Economics of COREMAP, and John Dixon, advisor to Biodiversity in Gland (April 1996) and at the project. They both stimulated me three seminars in the World Bank enormously in all stages of the process (January, March and May, 1996). and provided much appreciated V Executive Summary Indonesian Coral Reefs - A Precious but interest to scientists, students, Threatened Resource pharmaceutical companies, and others. These and many other functions give coral Coral reefs and their associated marine life reefs an important and growing value. are one of the greatest natural treasures of Indonesia. Both their quality and their Despite this, the quality of coral reefs in quantity are impressive: Indonesia is Indonesia is declining rapidly. Even located at the center of the world's coral remote reefs in unpopulated areas are not reef diversity and, with some 75,000 km2 of free from man-induced deterioration. coral,' it holds approximately one-eighth of Anthropogenic (man-made) threats range the world's coral reefs. Coral reefs form the from destructive fishery practices to core of the livelihood for hundreds of pollution and from dredging to tourism- thousands of Indonesian subsistence related damages. At the moment, only 29 fishers, and a source of food security in percent of Indonesian reefs are in good times of agricultural hardship. They also condition (that is, with more than 50 provide a natural barrier against wave percent of live coral cover). In Ambon Bay erosion, thereby protecting coastal and near the Thousand Islands off the dwellings, agricultural land and tourism coast of Jakarta, once pristine reefs have beaches. They are a potential source of been transformed into dead wastelands foreign exchange from divers and other over the last twenty years. Figure E-1 marine tourists. In addition, because of shows this deterioration as measured by their unique biodiversity, they are of great Figure E-1: Temporal and Spatial Comparison of Maximum Depth of Living Coral Reef for 4 Islands in Jakarta Bay (names and distance in km from coast are given for each island) 12 10- 8- 6 L *data 1931 4 -0odata 1986 2 g data 1993 0b Onrus (2.8km) Kelor (3.5km) Ubi B. (4.9km) Air B. (8.5km) Source: Tomascik et al. (1993); reference to primary data sources are given there 1 Economic Analysis of Indonesian Coral Reefs the maximum depth of live corals in four providing an economic rationale for islands in Jakarta Bay. preventive or remedial efforts. For coastal protection and tourism losses, we have The five main man-made threats leading to given both 'high' and a 'low' scenario coral reef deterioration in Indonesia, are: estimates, depending on the types of coastal construction and tourism potential. * poison fishing where cyanide is "High" cost scenarios are indicative of sites squirted on coral heads to stun and with high tourism potential and coastal capture live aquarium and food fish, protection value. "Low" cost scenarios are but killing coral heads in the process; indicative of sites with low tourism and * blast fishing, whereby small bombs are coastal protection value. detonated in shallow reef areas, killing Some of the most important values of coral targeted schools of fish, but also killing reefs, such as those to future generations larvae, juveniles and corals; and intrinsic values, cannot be quantified. However, since the economic benefits from * coral mining, where corals are collected reef destruction are often used to justify and smashed for house construction continuation of these destructive practices, and lime-production; quantifying the costs associated with coral reef degradation is important to make a * sedimentation and pollution as a result balanced assessment of the benefits and of logging, erosion, untreated sewage costs of various threats. The analysis is and industrial discharges, which mainly based on observable data such as smother and kill the corals; and the value of the decline of fish catch or * overfshing, which does not destroy expenditures by hotels on groins to temporarily prevent beach erosion. Total corals but reduces abundance and costs should thus be interpreted as rough diversity of fish and invertebrates. estimates of the lower range of true costs associated with reef destruction. The Private Gains versus Social CostsasoitdwhrefetuconTe numbers in Table E-1 are generated on the Powerful economic forces are driving the basis of available data, using hypothetical observed destructive patterns of coral reef examples of sites subject to one individual use, often rendering short-term economic threat. profits sometimes very large, to selected Table E-1 clearly points out the devastating individuals. Measures for coral reef economic consequences of a 'policy' of protection are often presumed to conflict inaction. In fact, for none of the threats do with economic development, and are said the short term benefits even approach the to require a sacrifice of economic growth. long term costs (using a 10 percent However, this study shows that this discount rate2 .and a 25 year time horizon). perception stems mainly from a failure to For example, coral mining is estimated to recognize the magnitude of costs to the present and future economy resulting from yield ne be2efset invduaseoeUS reefdegrdatin. Tble -1 sows121,000 per km2 of reef (in net present ofef de th. abetso w s value terms), while causing net losses to estimates otsociety of US$ 93,600 in fisheries value, losses to society from each square kloetoe y ofor re h sar , US$ 12,000-260,000 in coastal protection kilometer of coral reef destruction, 2 Executive Summary Table E-1: Total Net Benefits and Losses due to Threats of Coral Reefs (pasent vdua D%dscownrdg25y tiepm;mIn V0US$;perIQ) Net Benefits Net Losses to Society to kidividuals .' Function Total Net . - Los Total Net Coastal Food Bio- (quanti- Threat Benefits Fishery Protection Toursm Security diversity Others lyable) Poison Fishing 33.3 402 00 26-4356 n q n.q n q 42.8- 475.6 Blast Fishing 146 863 89- 193.0 2.9-4819 n q. n q n q 98.1-7612 Coral Mining 121.0 936 12.0 - 2600 2.9 - 481.9 n q n.q > 670 175.5 - 902.5 Sediment.- -logging 980 810 _ 1920 nq n.q nq 2730 Sediment. -urban Overfishin 385 1089 nq4 n q nq nq 708.9 value, US$ 2,900-481,900 in tourism value, holding more than 50 percent of the total US$ 67,000 in forest damage, and share (Johannes and Riepen, 1995) and a unknown costs due to lost food security total value estimated at some US$ 200 and biodiversity. Sometimes, the million per year. Both in the restaurant differences are even larger. For blast retail business and in the older aquarium fishing in a 'high' value scenario, the costs fishery, cyanide is nearly exclusively used are estimated to be more than 50 times as the 'cost-effective' way of harvesting live higher than the benefits. Note that in the fish. If current catch rates continue, the 'low' value sites, the largest cost to society live-caught restaurant fish business will is foregone fishery income, while in the probably collapse economically in around 'high' value sites, coastal protection and four years (Johannes and Riepen, op. cit.), tourism form the largest losses. Needless as rapidly decreasing stocks in Indonesia to say, costs and benefits are very site- will make remoter Pacific Islands and specific and numbers will vary, depending Papua New Guinea fishing grounds more on local circumstances. profitable. Major Threats Large scale poison fishing vessels operate in remote and unpopulated areas of Poison Fishing Indonesia, leaving behind a mosaic of coral destruction. Table E-2 shows estimates of With Hong Kong restaurant prices as high costs and benefits of these operations for as US$ 60-180 per kilo for certain types of the whole of Indonesia, under the groupers and Napoleon wrasse, the wild- assumption that this business will become caught live-fish trade has a gold rush-like economically non-viable in four years due character. Though Indonesia has only to a decline in catch rates. Rough estimates recently become involved in cyanide of a sustainable alternative in the form of fishing, it is now the single largest supplier hook-and-line live-grouper fishery, as used of these fish for the Asian food market, in Australia and elsewhere, are also 3 Economic Analysis of Indonesian Coral Reefs Table E-2: Costs and Benefits of AlH Remaining Indonesian Large Scale Poison Fishing and their Sustainable Alternative over 25 years with 10% discount rate (in US$ 1,000,000) i sustainable with cyanide (with hook& line) . . . . oss benefits costs benefits direct costs/benefits sales oarower 475.5 680.8 - abour 108.1 154.7 bot hiec~ 79.2 204.2 cyargde 6.. 6. 0.0 scUBA{hooka15 . 0. sid-Mament (6.7% of sales) 31.7 0.0 ubtotal (direct) 241.2 475. 359. 0 6808 indirect costs/benefits coastal 00tectio . 0.0 forgoe tuism_280.2 0.0 hospital, maarity etc. - nq 00o biodiensity, etc. n.q. 0.0 quant, subtotal (indirect) quant, total costs/benefits 521.4 475.5 359.0 680.8 ,net benefit to societV 4. 324.6 presented. Note that even in the absence of illegally purchased dynamite, often from any alternative, the large scale poison civil engineering projects, are currently fishery creates a net quantifiable loss to used. The explosion shatters the stony Indonesia of US$ 46 million over four corals and kills fish and invertebrates in a years. On the other hand, a sustainable large surrounding area. Over time, blast hook-and-line fisheries option could create fishing damages the whole reef and foreign exchange for the country, jobs for thereby destroys the resource base of many an estimated 10,000 Indonesian fishers for subsistence fishers. The analysis, shown in many years to come and net benefits of Table E-1, illustrates that the costs in terms some US$ 321.8 million (in present value of foregone sustainable fishery income terms). alone are nearly six times as high as the short term gains from blast fishing (US$ Blast Fishing 86,000 vs. US$15,000). The other losses to society, in terms of foregone coastal Though forbidden in Indonesia and protection and tourism are even higher in elsewhere, and despite the inherent areas with high tourist potential and/or dangers, home-made bombs are still a very considerable coastal construction. These popular fishing 'gear' used to catch schools losses are estimated at US$ 193,000 and of reef fish and small pelagics and thereby US$ 482,000 respectively, as illustrated in 'earning money the easy way'. In the past, Figure E-2. the explosive charge came from World War II bombs, though fertilizers and 4 Executive Summary Figure E-2: Net Present Value of Blast Fishing to Individuals and Associated Losses to Society per km2 of Reef (Scenario: HIGH; in 1000 USS; over 25 years; 10%discount rate) 50.0 -50.0. net pnYwe loss of loss of lbego,,s -100.0 - benefits tounsm coastal sustnable -150.0 from blast pmtection isthery -200.0- 1lshng ircor -250.0 -400.0 -450.0 -500.0 Coral Mining Sedimentation and Pollution Corals have long been used for building Sedimentation, both from urban areas and material and for the production of lime, as from logging activities, smothers corals as well as in the ornamental coral trade. The it prevents them from capturing sun light lime is often used as plaster or mixed with and plankton - their primary sources of cement to reduce costs for private energy and nutrition. Pollution, both from dwellings and local administrative offices. agro-chemicals and industrial discharges, Coral mining not only destroys reef flats, can also kill corals. These problems are and thereby its coastal protection function, particularly acute close to estuaries of but leads indirectly to logging of rivers and urban centers. Figure E-3 shows secondary forests, which is used for lime the correlation between live coral cover burning. The external economic costs of and distance from land for islands near this logging is estimated at some US$ Jakarta. For urban-induced sedimentation, 67,000 per km2 of coral flat mined, as much no economic costs have been calculated: as the total rent that all the miners get for typically they vary dramatically with the this area. Coral mining used to be very site, and reduction of discharges often has widespread in Bali, where some hotels are many other economic benefits (such as now paying high prices (over US$ 100,000 sanitary improvements and disease a year) to mitigate the resulting beach control), making the costs to corals erosion. Hotel-chain managers have learnt probably minor. Estimates by Hodgson from this, and state that the status of coral and Dixon (1988) for logging-induced reefs is currently a decisive criterion in sedimentation damage to a coral reef in site-selection for new resorts. Mining Philippines showed costs 2.8 times higher activity is still practiced in other islands than the associated benefits. with large tourist potential, mainly Lombok, where total net costs to society Overfishing are estimated to be 7.5 times higher than the net benefits to individuals. Though not necessarily as destructive as the other threats described above, 5 Economic Analysis of Indonesian Coral Reefs Figure E-3 The Relationship between Live Coral Cover and Distance from Land (28 observations from islands of the Pulau Seribu group off Jakarta; 1986 data; distance in kin) a - 0 co a 00 C Disance from sami Source: Hutomo (1987); reference to primary data source is given there. overfishing does damage coral reef, mainly establishment of closed seasons. Figure E-4 through a reduction in fish diversity. It shows the dramatic difference in yield also decreases the value of corals to between a three-year harvesting cycle recreational divers, who are eager to see versus a one-year harvesting cycle for both large predators and abundance of mother-of-pearl shells (trochus) in Maluku. small colorful fish. For the cost-benefit Note that the three year closed seasons calculation of overfishing, we have ending in 1978 gave an average yield of abstracted from foregone tourist revenues 3,400 kg, or more than 1,100 kg per year. In and only estimated the loss in rent from the annual collection pattern followed the fishery at 'open access' vis-A-vis the since 1987, the average yield per year is 'maximum sustainable yield'. The present just over 400 kg. Transfer of fishing rights value of this loss per km2 iS US$ 70,000, as to local communities as well as given in Table 1. This means that on reintroduction of traditional rights, such as average, coral reef fisheries could produce the 'sasi' system in Maluku, are other an additional US $70,000 in net present effective ways of dealing with overfishing value per km2 Of reef if effective and destructive fishing practices. management was introduced. Balancing Winners and Losers In general, the necessary reduction in effort to avoid overfishing and achieve Given the high societal costs created by optimal sustainable yields is in the order of these threats, the question arises why the 60 percent (McManus et al, 1992). threat exists in the first place. Two Alternative income generation, for instance stakeholder issues seem to be of critical in eco-tourism, could be one potential way importance: (i) the size of the stakes per of bringing about this reduction in effort. person; and (ii) the location of the Besides lowering the total effort, fisheries individual causing the threat vis-&--vis the management efforts should also focus on location of the threat itself. With respect to the creation of sanctuaries and the first point, the size of the stakes 6 Executive Summary Figure E-4: Yield of Trochus (Mither-of-PeWl) in Nolath (Central MalukL) in 1969-1992 per kg 4500 RUU 4000 3500 3a (7s 3000 2450 22500 2000 D031100 1425 150 1125 000 easson =7225 5o00 s 0 M~ a CM COj W~ r.. G o cj o0 q U, LD to . r co 0 - 4 CD ~ ~ ~ r go Go.NNNN DC CC 00 0 WD 00 CD OD M~ 0~C time (soacuiagwedfrakaginNooiku) per person, Table E-3 shows the private sedimentation have by far the highest benefits that accrue to the various groups private incentives, ranging from US$ 2 of stakeholders as well as to each of the million per company in the case of logging persons/families/boats/companies to over US$ 0.4 million per boat in the case involved. The total amount of benefit is of poison fishing (in present value terms). equal to the value presented in Table E-1. Side-payments are also particularly high, The column 'Others' presents the very roughly estimated at some US$ 0.3-1.5 payments to third persons, sometimes million for some receivers of large referred to as 'political rents'. payments. On the other extreme, coral mining is a very marginal activity for the Note that the net benefits per square families involved, though the side- kilometer to individuals seem to be highest payments are not negligible. for coral mining. However, if we look at the private benefits per stakeholder Some major caveats apply with respect to (person/boat/company/etc.), poison Table E-3: the stakes per person are fishing and logging-induced calculated on the basis of man-years. For Table E-3: Net Benefits to Individuals: Amount-per km2 and per Stakeholder (latter in parentheses; present value; 10% discount rate; 25 y. time-span; in 1000 US$; per k2) Individuals Others Total per Threat Fishermen Miners, Loggers (payments) km2 29.3 4.0 33.3 Poison Fishing (468.6 per boat) (317-1585 (23.4 per diver) per person) 14-6 - ? 14.6 Blast Fishing (7.3 per fisherman) 67 54.0 121.0 Mining (1.4 per mining family) (18.0 - 54.0 per person) Sedimentation- - 98.0 98.0 logging (1990 per loggingfamily) Sediment.-urban ? ? ? ? 38.5 38.5 Overfishing (0.2 per fisher) J 7 Economic Analysis of Indonesian Coral Reefs mining, where families are involved scale explosives fishery operations do nearly full-time with this activity, this exist (Erdmann, 1995). approach represents rather well the real stakes per person. But in the case of blast The insider versus outsider issue and the fishing, where many subsistence size of the stakes per person are high- fishermen use bombs occasionally, the lighted in a two-by-two matrix presented actual stakes involved per person are in Table E-4. The boxes in the matrix refer much lower than the net present value to the specific threats, such as poison figure of US$ 7,300 given in Table E-3. For fishing in the box "big & outsider". Note instance, if blast fishermen use bombs that these are general tendencies, and only once a month, rather than every day, there will inevitably be site-specific the stakes in net present value are less circumstances that form exceptions to this than US$ 300 per person. A similar story framework. holds for poison fishing, where divers are often recruited for short periods of time Designing Appropriate Policy Responses only, overestimating the real stakes per diver significantly. At the same time, the In Jakarta, local stakeholder consultations overall picture that incentives differ are not very useful. If the stakes are small dramatically per threat remains valid and and there is one dominant threat, such as thaaticall tye of hage t mi ns coral mining in some locations on West that types of management mnterventions Lobk nertdcatlzn differ accordingly. In the case of urban Lombok, integrated coastal zone sedimentation, especially when some management (ICZM) may not be large industries are involved, the stakes necessary: a very direct approach, such as lag ndsre aeivovd hesae a small scale alternative income are probably high, though we have not a asc ecternative t e been able to estimate specific stakes per generation project, might be the easiest fore ths esimate i sway to resolve the threat. If there are person fmultiple threats, ICZM will be the For the second point, the location of the preferred solution, although outsider individuals causing the threat, it is threats have to be dealt with separately. crucially important to distinguish Based on these features, the following between stakeholders living in the area three general types of management where the threat is posed (insiders) versus approaches are defined: stakeholders coming from elsewhere (outsiders). For instance, in the case of Local Threat Based Approach (LTBA) large scale poison fishing operations, the If the dominant threat(s) in a specific site captain and his crew are outsiders, as is fall under the categories 'Small-Insider' also often the case with logging-induced and/or 'Small-Outsider', a local threat sedimentation. Overfishing, on the other based approach is probably appropriate. hand, can both come from local fishermen Tis typically takes the form of (insiders) as well as from outside community-based management. fishermen. Population pressure and open- Examples are villages with a combination access problems respectively are often of overfisg and some blast fishing. responsible for this situation. Mining and Appropriate options include alternative blast fishing are typically activities carried i out by the local population, though large o anielo reguliton and of anti-explosives regulation and establishment of cooperatives or other 8 Executive Summary Table E-4: Size of Economic Stake and Location of Stakeholder SIze of Economic Stakes small big coral mining, insider blasting, sediment. verfishing integratedCoastal -S___ _Zone Management cyanide, a outsider overfishing S logging Local Threat National rest Based Approach Based Approach types of fishermen groups. Re-introduction Integrated Coastal Zone Management of traditional common property resource (ICZM) management (e.g. 'Sasi'-system in Maluku) is another possibility. In some situations When sites cope primarily with 'Big- provincial regulations need to be adjusted Insider' type situations, or if the site is to allow for common property resource confronted with an array of different management. In cases like coral mining, ad threats that can not be dealt with hoc solutions might be appropriate. An separately, ICZM seems appropriate. This example is one village in Bali that stopped is for instance the case in Manado, with a coral mining completely after a local hotel large thriving diving tourism industry, offered employment as gardeners to all the that is more and more threatened by a mining families. variety of threats, from sewage to poison fishing. Other examples might include National Threat Based Approach (NTBA) Jakarta Bay and Ambon Bay, also with a variety of threats, related to urbanization In situations where the categorization 'Big- and population Outsider' applies for the main threat(s) in a specific location, action at the national Conclusions level is required. The clearest example is large scale poison fishing operations, that Coral reefs are a precious resource, with a often take place in remote and variety of functions, such as subsistence unpopulated areas. Strong initiatives at the fishery, coastal protection, tourism and highest national levels, involving the Navy biodiversity. The Indonesian reefs are and the Police are the only way to stop this being rapidly destroyed by a number of threat, as local and provincial officials are different threats, especially poison fishing, powerless in the face of these operations. blast fishing, coral mining, Likewise, sedimentation from large scale sedimentation/pollution and overfishing. logging and mining operations can only be dealt with nationally, as it is at that level The private benefits to individuals that the concessions are negotiated. involved in these destructive practices are often considerable. However, the costs to society are much larger, up to a factor of 50 9 Economic Analysis of Indonesian Coral Reefs higher in the case of blast fishing in tourist and logging operations, a 'national threat areas. The divergence between private based approach' is called for. With large benefits and social costs imply a highly stakeholders that are mostly insiders, inefficient outcome that calls for decisive 'integrated coastal zone management' will government action to stop these threats. be optimal. When the stakes are small, a 'local threat based approach' would give The policy response differs with the type the most immediate results, typically in the of threat. In cases where the immediate form of community-based management, stakeholders are outsiders and the stakes assisted with appropriate property rights are big, such as large-scale poison fishing legislation and enforcement. 10 1. Introduction With its more than 17,000 islands and communities, and coral mining is some 50-100,000 km2 of coral area3, threatening some of the most important Indonesia has one of the richest coral reef beaches in Indonesia. resources in the world. These form an important source of income to the local In order to stop this coral reef population (fishery, mariculture, etc.), deterioration, the Indonesian government often living at subsistence levels. Also, has started a new national program: the they are a potential tourist attraction, Coral Reef Rehabilitation and Management thereby contributing to local income Project (COREMAP)'. The aim of the generation and foreign exchange. Besides, program is to maintain coral reef they form a unique natural ecosystem, ecosystems and associated habitats (i.e. with important biodiversity value as well seagrass beds, beaches, sand dunes and as scientific and educational value. Finally, mangroves) in their best condition, or at a coral reefs form a natural protection level of best achievable ecosystem against wave erosion. function, which means as near to the natural condition as possible. The World At the moment, however, coral reefs are Bank is one of the key external players in being depleted rapidly in Indonesia and this Indonesian program. elsewhere due to destructive fishing practices (poison fishing, blast fishing, In order to understand the driving forces muro-ami, etc.), and due to coral mining, behind the current coral reef destruction, marine pollution and sedimentation. this paper provides an economic valuation Inappropriate legislation, weak and a stakeholder analysis of each major enforcement and strong incentives are threat. To this aim, hypothetical examples responsible for this. For example, live- for a.representative ecosystem with only grouper poison fishery in Indonesia is now one specific threat in an area of one km2 of reported to be a US$ 200 million business reef are worked out. Costs and benefits are per year. Buyers in export destinations described for each of these hypothetical give Indonesia another four years before situations, by comparing the managed and this trade is no longer economical and will the unmanaged policy alternative(s). The collapse, leaving behind a mosaic of coral economic analysis includes a stakeholder destruction in an area of thousands of analysis, showing who are gaining and square kilometers of formerly pristine who are losing from the persistence of each reefs. At the same time, explosive fishery of these threats. This gives indications of destroy livelihoods of coastal the type of interventions that are needed to 11 Economic Analysis of Indonesian Coral Reefs arrest the threats. Depending on whether cost estimate might be, it is the best way to the stakeholders are 'insiders' or show policy-makers the enormous social 'outsiders' for a specific area, and costs involved in a continuation of the depending on the size of the stakes, threat, compared to the often relatively different types management will be called small benefits from the destructive for. activities. The costs of a policy of inaction are the The paper will first discuss, in Chapter 2, losses in the value of the functions of coral the most important functions of coral reefs. reefs such as sustainable fishery, food It will also estimate the value of some of security, biodiversity, coastal protection, these functions. In Chapter 3, the five tourism, research. Only a few of these major threats (poison fishing, blast fishing, functions can be expressed in monetary sedimentation/pollution, coral mining, terms, and some of the most important and overfishing) will be analysed and an ones are not quantifiable. The benefits economic and stakeholder analysis will be accruing to some specific stakeholders are presented for each of the threats. Finally, much easier to monetise. In this paper, we Chapter 4 discusses the management have only attempted to quantify in money options for each of the threats. Appendix 1 terms the functions of 'fishery', 'coastal also gives a short annotated bibliography protection' and 'tourism', giving together a of literature on man-made coral reef lower boundary of the total costs involved. destruction. However, we feel that crude though this 12 2. Coral Reefs: Their Functions and Economic Value gradual drop of the sea-bed. Finally, atolls 2.1 Introduction are circular reefs that arise from deep-sea platforms such as submerged volcanic Coral reefs are the flowers of the sea, seamounts (Tomascik; op. cit; Post, 1982). surrounded by fascinatingly-colored fish with remarkable diversity. Reefs are rather The functions of coral reefs are numerous. productive shallow water marine They include (i) food and other resources ecosystems that are based on rigid lime (fish, mariculture, jewelry, aquarium items, skeletons formed through successive etc.); (ii) construction material (sand, rocks); growth, deposition and consolidation of the (iii) pharmaceuticals and other industrial remains of reef-building corals and coralline chemicals; (iv) tourism and recreation algae. The basic units of reef growth are the (diving); (v) educational and scientific coral polyps and the associated symbiotic interest; (vi) biological support (e.g. algae that live in the coral tissues. This breeding and feeding for offshore fish); (vii) symbiotic relationship is the key factor coastal protection (to prevent sand erosion); explaining the rather strict environmental (viii) fall-back life support system (during requirement of corals since the symbiotic agricultural crises, etc.); (ix) genetic algae require light for photosynthesis and resources; (x) global heritage; etc. (Bakus, can be easily destroyed by sedimentation 1982; Tomascik, 1993; and others). (Tomascik, 1993). Each of these functions has an economic Different structural types of coral reefs are value. Spurgeon (1992) identifies different distinguished: (i) fringing reefs; (ii) patch types of values for the various functions and reefs; (iii) barrier reefs: and (iv) atolls. divides these functions into these values. Fringing reefs are the most common type of Following the environmental economics coral reefs in Indonesia. They develop literature (Dixon & Sherman, 1990; Pearce & adjacent to the shore usually along rocky Turner, 1990), we distinguish (a) extractive coasts of uplifted islands or along the shores direct use values; (b) non-extractive direct of exposed limestone islands. Patch reefs are use values; (c) indirect use values; (d) non- isolated and discontinuous patches of use values. The mapping between the fringing reefs. Barrier reefs develop functions and the types of values is sometimes rather far away from coastlines in presented in Table 2.1.1. Note that the non- areas where coral growth has kept up with 13 Economic Analysis of Indonesian Coral Reefs Table 2.1.1: Types of Values Corresponding to Different Functions of Coral Reefs types of values functions direct use value (extractive) -food/other resources (fishery, etc); - construcion material - pharmaceuxicaLs and other indusirial chem. direct use value (non-extracrive) - tourism and recreation; - educational. scientific interest indirect use values - biological support; - coastal protection non-use values - fall-back life support; - gen. resources: - global heritage: & known and unknown future uses of the functions above source: adapted from Spurgeon (1992) use values also include known and harder or even impossible to get reliable unknown future values of direct and estimates for these other functions. For the indirect uses, often referred to as quasi- three mentioned functions, values can be option and bequest values. estimated relatively straightforwardly with techniques mainly based on market prices These values together can be taken to (Dixon & Sherman, 1990). Combined, these calculate the Total Economic Value (TEV) monetary values form a lower bound for for alternative uses (e.g. preservation area, the total cost of destruction of coral reefs. tourism area, multiple use area, etc.). Note The sum of these quantifiable losses will, that the further down in Table 2.1.1, the in Chapter 3, be compared with the less tangible and person-specific the benefits of reef damaging activities to benefits are. The aggregation of economic evaluate the quantifiable net societal values needs to take the compatibility of gains/losses due to these activities. the different functions for a specific use into account (Spurgeon, 1992; Barton, 1994). Following this method, the TEV for 2.2 Fishery specific coral reefs can be calculated. For West Lombok (NTT, Indonesia) this is Coastal communities throughout calculated by Riopelle (1995), who Indonesia rely heavily on reef fisheries. estimated the total economic value' of Especially for the poor, subsistence reef coral reefs as high as US$ 58.2 million for fishery is their main or only source of West Lombok, which corresponds to more animal protein. Besides, collection of than US$ 1 million per km2 of reef. invertebrates, foodfish, shells, seaweed and corals on reef flats often by women In this study, no attempt is made to gives badly needed additions to family calculate the TEV. Instead, values are income. Reef fishery constitutes some 10% calculated for some specific functions, in of total fish production in the Philippines order to calculate the economic loss due to and some 5% to 10% for Indonesia. This destruction of these functions. The number may, however, be much higher in functions that will be analyzed in some actual fact as most subsistence fishery is detail are: (i) fisheries; (ii) coastal often not included in fishery statistics. The protection; and (iii) tourism. As stressed percentages are much higher elsewhere in above, this does not imply that the other the Indo-Pacific region, up to 25% functions are less important, only that it is (Campos et al. 1994; Kelleher et al. 1995). 14 Coral Reefs: Their Functions and Economic Value Types of Fishery invertebrates of 15 mt/km2/yr. Yields for each of these vary significantly. Russ The fishery consists primarily of finfish, (1991) summarizes 11 studies on yields of invertebrates (mollusks, crustaceans) and small coral reefs in South East Asia, with seaweed. The finfish catch is very diverse estimates ranging from 0.42 to 36.9 metric and includes both pescivores such as tons per km2per year. According to Russ snappers (fam. Lutjanidae), groupers (fam. (1991), these differences may be due the Serranidae), as well as herbivores, such as following factors: parrotfish (fam. Scaridae), surgeonfish (fam. Acanthuridae) and many others. Reef * the reefs differ in size: areas of large fishery also include significant proportions coralline shelf are less productive than of small pelagics (Scombridae, Clupeidae, small and actively growing coral reefs; Carangidae), which move in and out of reef this also explains why earlier studies areas in search of food and protection. focusing on large coral areas (Munro & Invertebrate collection consists mainly of Williams, 1985) have found yields with giant clams (Tridacna spp.) and other a lower range of 0.8 to 5 mt/km/year; bivalves, seacucumber (fam. * the level of effort: this differs per site, Holothurioideae), octopus (Octopodidae spp.), but is generally considered to be high spiny lobster (Palinurus spp.) and mother- for the studies quoted; this means that of-pearl shells (Trochus spp.). Seaweed (esp. the potential yield may be considerably Eucheuma spp.) is dried and sold as food larger than actual yields data where additive (carrageenan). overfishing is not unusual; * the definition of the total reef area: this Productivity depends on the assumption of the maximum depth reef fishing; Russ The primary productivity of reef (1991) quotes an example of a yield ecosystems is very high (ca. 70 tons estimate of 24.9 metric ton/km2/year carbon/ha/yr.), but compensated by high when the area estimate is based on a respiration. Net productivity ranges maximum depth of 60 meters; with a 20 around 300-1000 gram carbon/m/year, 20 meter maximum, the yield would have times as high as the open sea. Some argue, been 48.79 mt/kmr/year; a depth of 40 though, that coral reefs only occur in meter is often taken as a standard; waters of low nutrient content, and that * the definition of reef fish: not all fish they can therefore not generate large caught in reef areas are reef or reef fishery. However, Munro & Williams related species; because pelagic 'off- (1984), argue that (i) coral reefs are often reef' fish may dwell there occasionally close to mangrove ecosystems with as well; the quoted articles may have abundant nutrients; and (ii) many of the used different definitions of reef fish. reef-dwelling fishes and invertebrates are planktivores, and reefs serve as a giant Alcala (1988) states additional factors plankton net. This leads them to believe influencing fish yields. He suggests among that reefs can indeed yield high fishery others that yields are positively correlated production. with the size of the adjacent shallows and with the degree of live coral coverage. Munro (1984) presents estimates of a Also, harvesting at different tropic levels sustainable harvest of edible finfish and influences fish yields where lower yields 15 Economic Analysis of Indonesian Coral Reefs are expected when top carnivores are 10-20 mt/km2/yr with a mid-point of 15 fished rather than herbivores and mt/km2/Yr. 8 planktivores. The latter is shown in Alcala (1988) by comparing islands in the * Of this total, finfish form two-third of the Philippines. yield or 10 mt/km2/yr and invertebrates form one-third or 5 mt/km2/yr, if we use the On the basis of the above considerations, mid-point estimate of total reef yield and a Russ (1991) suggests that sustainable 50% reefflat, 50% reef slope assumption. yields in the order of 10-20 metric ton/km2/year are feasible for small areas Fishing Effort of actively growing coral reef. This is in line with McAllister (1988) who assumes Fishing methods include hook and line, sustainable yields of 18 mt/km2/year for portable fish traps and gill nets, as well as reefs in excellent condition, 13 spear-fishing and destructive techniques mt/km/year for reefs in good condition (blast fishing, poison fishing, muro-ami). and 8 mt/km2/year for reefs in fair Invertebrates such as lobsters and sea- condition. It also corresponds to a cucumber are often collected using free- summary by Alcala (1988) on three diving. Others are often gathered by hand Philippine islands with yields ranging on the shallow reef flat (reef gleaning). from 10.94 to 24 mt/km2/year. Fishing effort varies greatly per technique. Campos et al. (1994) gives catch per unit With the above discussion in mind, we effort for different type of gear on reefs, take as a working hypothesis a maximum showing that species composition and the sustainable yield of 15 mt/km2/yr of reef total catch per unit effort vary fishery up to a depth of 30 meters for reefs considerably with different techniques. in good to excellent condition (low level of hard coral mortality). Invertebrates are The optimal level of effort for a productive mainly collected at the reef flats while reef is difficult to calculate. This is partly some of the more valuable finfish are because of the subsistence nature of much harvested on the reef slope. Invertebrates of the reef fishery: many people use the are mainly collected on the reef flat, where reef for a couple of hours a day, part of the they form around 50% of the total yield year. Here, we assume as a very rough and finfish yield seems to be quite similar working hypothesis, on the basis of the at different parts of the reef (McManus, available data and on the basis of our own personal communication). This means that observations in Biak (Irian Jaya, in a reef with 50% reef flat and 50% reef Indonesia), that the catch at the optimal slope, one-third of the total yield is effort level is five kg/day/person. With a invertebrates and two-third are finfish, yield of 15 mt/km2/yr, this implies an though this depends on the type of reef optimal effort of 10 full-time menyears for and the length of the reef-flat. The a square kilometer of reef (with 300 fishing assumptions are therefore: days per year). Note that in reality, several members of many subsistence fishermen * The maximum sustainable yield offinfish families are involved on a part-time basis and invertebrates in reefs in excellent or in the harvesting of the fishery. So, in good condition up to a depth of 30 meters is actual fact, fifty or more subsistence fishery families may well live from the 16 Coral Reefs: Their Functions and Economic Value Figure 2.2.1: Yield-Effort Curve in Non-Destroyed Reef and Costs of Effort per km2 of Reef per year (in 1000 US$) 2 ^ 16.0 0 M 14.0- 4 12.0-- --- yield and total revenue E 8.0 --- total costs 6.0 -,4.0. 2.0- 0.001 0.0 10.0 20.0 30.0 40.0 Efort (manyears) reef-related yields for part of the year, as reality, the assumption that they coincide our own investigations of a representative is probably not a serious drawback given COREMAP-site show. However, for the the virtual absence of capital costs and the economic analysis, we will work with full- very low opportunity costs of labor, the time men-years. Figure 2.2.1 gives the points will be close together in reality. The yield-effort curve in this situation, on the point in Figure 2.2.1, where the yield-effort basis of discussions in Munro & Williams curve and the cost curve intersect, is the (1985)9, McManus et al. (1993) and others. open access yield (OAY). In this situation, the level of effort is such that that The yield-effort curve in Figure 2.2.1 is a fishermen are, at least in theory, indifferent piece-wise linearisation of the standard between fishing and alternative dome-shaped curve in fishery economics. employment. The cost curve will be The curve is constructed so that the discussed below. Needless to say, concepts optimal sustainable yield is twice as high such as MSY and OAY are not as clear-cut as the open access yield, with a 60% lower in case of subsistence fishery, with a lot of effort (McManus et al, 1992)". This implies part-time work and very few alternative a yield per full-time fisher of 1 kg per day. income possibilities, as they are in the case Note that, especially in tropical fishery, of large-scale fisheries. one should ideally look at more complex multi-species models. However, we lump Fish Prices here all reef fishery together for simplicity, following Munro & Williams (1985), and McManus et al. (1992) gives an extensive many others. list of prices of many fish and invertebrate species at a local market in the Philippines. The shape of the yield curve implies that Most species are in the range of P15-40 per the optimal sustainable yield (OSY) and kg (US$ 0.6-1.6). In Biak (Irian Jaya, the maximum sustainable yield (MSY) Indonesia), our own survey results show coincide. This point is the highest point of that the local cooperative gives a price of the dome-shaped yield-effort curve. Rp. 1800 (US$ 0.82) per kg, irrespective of Though the OSY and MSY are different in the type of fish. Some local fishermen said 17 Economic Analysis of Indonesian Coral Reefs Table 2.2.1: Assumptions for yields and annual income in non-destroyed reefs effort yield value f l yield net income not come Rp. net _______yield -labo ur costs Icosts bene iel neincoeoetmeo uns rnMA*r rTtr2rm US S)rn2/rr(in 1000US$) kqtnmktby USSfamW. US$ArtnAt, RP*nmW 0 0.0 0.0 0.0 0.0 0.01 0.0 0.0 0 0.00 0 5 12.5 12.5 1.4 0.1 1.5 11.0 8.3 2473 8.24 18,133 MSY 10 15.0 15.0 2.7 0.3 '3.0 12.0 5.0 1473 4.91 10,800 15 12.5 12.5 4.1 0.4 4.5 8.0 2.8 806 2.69 5,911 20 10.0 10.0 5.5 0.5 6.0 4.0 1.7 473 1.58 3,467 open access 25 7.5 7.5 6.8 0.7 7.5 0.0 1.0 273 0.91 2,000 30 5.0 5.0 8.2 0.8 9.0 -4.0 0.6 139 0.46 1,022 40 0.0 0.0 10.9 1.1 12.0 -12.0 0.0 -27 -0.09 -200 that they would typically bring most of the Reef Destruction catch to the cooperative with the exception of a few valuable species. Given that the In many instances, the yields in the species composition is rather variable, it is literature are much lower than the ones very difficult to make any generalizations. presented here. This could be the result of Besides, the prices vary considerably with anthropogenic destruction of the reef (blast availability of markets, consumers, etc. fishing, poison fishing, etc.). Therefore, we Here, on the basis of the prices quoted have created graphs and tables similar to above, we make the bold working the ones above for different degrees of reef assumption that the economic value of an destruction. The numbers for 25%, 50%, average catch is US$ 1 per kg. This means 60% and 75% destruction are given in that the yield-effort curve can both be Appendix 1. These are summarized in interpreted in volume terms (kg) and in Figure 2.2.2. The exact numbers are value terms (US$). unknown, but the present estimates seem to be reasonable: a reef area that is 50% The economic value of the catch of reef destroyed is assumed to have a maximum fishery is US$ 1 per kilogram. sustainable yield that is 50% lower than that of an intact reef, etc. Costs Condition of the Reef Subsistence fisheries involve typically minor capital costs. This might consist of Reefs can vary enormously in their coral costs for a little out-rigger boat without cover, even in pristine state. In early motor and some home made gear. works, coral cover was often used as an Sometimes they use ice to keep the fish indicator of the condition of the reef (>75% fresh. On the basis of our own survey in coral cover: excellent condition; 50-75%; Biak and other available data", we assume good condition; 25-50%: fair condition; < that total costs are Rp. 60,000 (US$ 27.3) 25% bad condition; see McAllister, 1988). per year per person. Fishermen often have However, reefs can be in pristine state and very few possibilities for alternative have a high fish abundance with a coral income generation. Here we take as cover under 50%, and likewise, reefs with opportunity cost of labor the wage of a nearly 100% coral cover can have low fish rural worker of Rp. 2000 (US$ 0.9) per abundance. Therefore, Gomez et al. (1994) day2. Combining yields, prices and costs, use a mortality-index as a proxy for the we get Table 2.2.1, which forms the basis of condition of the reef. This mortality index Figure 2.2.1. is defined as the ratio of dead coral cover 18 Coral Reefs: Their Functions and Economic Value Figure 2.2.2: Yield-Effort Curves and Cost Curve for Different Levels of Reef Degradation per km2 per year (in 1000 US$) 16.0 W 14.0- - 12.0 10.0 8.0 6.0 4.0 2 2.0-x 0.01 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 Effort (in man years) ---yield and total revenue --e-- yield (25% destroyed) ---yield (50% destroyed) - yield (60% destroyed) -x-yield (75% destroyed) -*--total costs to the sum of total dead and hard coral years in most tropical fisheries. However, cover. Following this approach, the if the reef habitat is partly destroyed due to mortality index is used as a proxy for reef blasting, cyanide, etc. recovery may take degradation in Figure 2.2.2. much longer (see below). Data on Sumilon and Apo, two islands with medium to Recovery good coral cover show that fish recovery takes place in 6 to 8 years, but that a Besides the maximum sustainable yield collapse of management leads to the same and the open-access equilibrium, it is pre-management level in as little as 4 crucial to have insight in the recovery time years, even in the absence of destructive of intensely fished reefs once appropriate fishery practices (White, 1989). On the management is installed. McAllister (1988) basis of the presented evidence, we states that the effects of overfishing, once assume here a recovery time of 7 years. corrected, are restored in less than ten Summary of Fishery Assumptions: * The hard coral mortality-index is used as proxy for the condition of the reef: * The maximuin sustainable yield offisherv in reefs in excellent or good condition up to a depth of 30 in. is 10-20 mtlbn-/r wh a inid-point of 15 nt/knyr: Reefs that are 50% . destroyed (mortality-index 50%) have a 50% lower maxinun sustainable yield: . Of this total finfish fonn two-third of the yield and invertebrates finmi one-third, * Recovery of the fishery stock of healthy reefs is assumed to take place in 7 years: * The average economic value of I kg offish or invertebrate is LS$ I; 19 Economic Analysis of Indonesian Coral Reefs multiplier for coastal tourism of 2-3. Here, 2.3 Tourism we assume conservatively, that coastal The tourism/recreation function of coral tourism has a multiplier of 2. reefs depends crucially on the area. Though not all tourism depends on coral Accessibility is one of the most important reefs, much coastal tourism depends to an determinants of tourism potential of an extent on the quality of the reefs. In a area. Here, three areas will be nation-wide review of marine tourism distinguished: (i) remote and sparsely potential, the status of coral reefs came up populated areas (no current tourism nor as one of the decisive factors in site future potential); (ii) less remote areas selection (Dutton, 1993). This was (some present tourism and/or future confirmed by a manager of one of the tourism potential); (iii) areas with major largest Indonesian tourist resort groups, tourism activities/potential. The who states that healthy reefs were a sine distinction is rather arbitrary. For instance, qua non for new sites. This policy was tourism in Lombok was virtually non- introduced after major investments had to existent in the 1960s, whereas currently it be made in two other sites where coral amounts to 16% of total GNP of the island destruction had taken place. This conveys (Riopelle, 1995). Therefore, areas currently the importance of healthy reefs for any not viewed as having tourism potential type of possible future coastal tourism due to reasons such as inaccessibility developments. might open up in the future. Note, however, that tourism can also be a Major Tourism Potential significant threat, due to solid and human wastes, boat anchoring, coral breaking In important tourist areas, the net benefits (inexperienced divers), etc. For a recent from tourism are probably larger than the study on tourism carrying capacity, see value of any other function. Riopelle (1982) Dixon et al. (1995). For an overview of the studied reef-related tourism on West literature on tourism-related damage, see Lombok (coastline of around 40-50 km), Appendix I. and found a total net present value of benefit from divers and snorkelers of US$ The valuation of the three types of areas 23.5 million at a 10% discount rate3. This will be used to construct two scenarios: would mean a present value of direct total LOW and HIGH. The LOW scenario is a net benefit of around US$ 500,000 per km situation in between 'no' and 'some' of coastline. With the tourism-multiplier of tourism activities and/or potential. The 2, this gives a net present value of US$ 1 HIGH scenario is a situation in between million per km of coastline. This number is 'some' and 'major' tourism activities even much higher in Bali and in Manado, and/or potential. These two scenarios will which currently derives tens of millions allow us to give, in Chapter 3, a range of per year from marine tourism, much of it the costs involved in damage to the from visitors to the Bunaken Marine Park. tourism function of coral reef. Expenditures on tourism are often Some Tourism Potential assumed to have a high multiplier effect for the local economy. Lindberg & In areas with some tourism potential, it is Enriquez (1993) and others give a very hard to assess the net benefits from tourism. In South-West Ambon (Maluku, 20 Coral Reefs: Their Functions and Economic Value Summary of Tourism Assumptions (with a 10% discount rate and a 25 year period): * The value of the tourismfmcrion is zero in areas with no tourism potential; * Its net present value is US$ 6,000 per km of coastline in areas with some rourisn; * Its net present value is LIS$ I million per km of coastline in areas with major tourism; For our two scenarios per square kilometer of coral reef, this corresponds to: * The LOW scenano has a net present value of US$ 3,000Wkm of coral reef * The HIGH scenario has a net present value of US$ 503,000/kn of coral reef Indonesia), some data were gathered on one km2 of coral reef corresponds to one losmen (homestays; bed & breakfast). The km of coastline. Needless to say, this is a village had three losmen in an area of very rough assumption: there are coral around one km of coastline. The price was reefs with no coast (atolls), and there are 20,000 Rp. per room per day with an areas with only a few meters of reef. But occupancy of around 25% (two rooms per for some of the areas for which the data losmen). Of the tourists, some 30% was have been gathered, this seems a linked to coral reef tourism (of a small reasonable average. As discussed above, nearby Dive Center). Taking this example, the HIGH scenario represents a situation the gross revenue of small scale tourism in between 'some' and 'major' tourism per km of coastline would be US$ 550 per activities and/or potential. Its value is year. Taking a 60% profit margin, that taken to be the mid-point of the valuation seems in the appropriate range for losmen, of the two situations or US$ 503,000 per we get a net direct revenue of US$ 330 per km of reef'4, again taking a 10% discount year or a net present value (25 years; 10%) rate and a 25 year time horizon. The LOW per km of coastline of US$ 3,000. With a scenario corresponds to the situation in multiplier of 2, this implies a total net between 'no' and 'some' tourism potential present value of US$ 6,000 per km of coast. and/or activities. The net present value, again the mid-point, is US$ 3,000 per km' No Tourism Potential of reef. In remote and sparsely populated areas, * we assume that there is no tourism 2.4 Coastal Protection potential. At the same time, even in the remote areas there might be occasional Coral reefs act as wave breakers and presence of some live-aboard diving thereby fulfill an essential function of operations, and some eco-tourism coastal protection. The valuation of the potential. However, we take here as impact of decreased protection due to coral working assumptions that the value of the mining or other forms of destruction is tourism function is zero in remote areas. dependent on current and/or potential future economic activities of the area. HIGH and LOW Scenario per km' of Reef Three situations will be distinguished: (i) areas that are remote and are sparsely The values presented above are in the populated; (ii) areas that are less remote units 'per km of coastline'. Fishery and and moderately populated with some other data are in the units 'per kim". In stone construction; (iii) areas with major order to match these two numbers, we infrastructure (e.g. tourism facilities). assume here as a working hypothesis that 21 Economic Analysis of Indonesian Coral Reefs These are mapped, as before, into a HIGH houses of stone (or at least with stone LOW scenario. Also, as before, we assume foundations) and there may be gravel that one km of coastline corresponds to roads, or even partly asphalted roads. one km2 of reef. Moreover, we assume for Where some construction is built in the simplicity that destruction of one km2 of immediate vicinity of the beach, the cost of reef leads to beach erosion of one km of these constructions may be a proxy for the coastline. value of decreased coastal protection. The cost per km of a roads in rural Indonesia Coastal Protection in Remote and Sparsely ranges from US$ 5,000 to US$ 150,000 Populated Areas' depending on quality, material and terrain. The roads built close to the shore are In areas without major tourism potential probably on the lower end of this cost and without other construction of range. Therefore, we take here as a rough economic significance, the value of land estimate of the costs: US$ 25,000/km. The lost could be used as a proxy for the cost costs of a stone house with concrete of coastal erosion. The value of land can foundation might be in the order of US$ be estimated as the present value of 1,500-2,500. Assuming 100 houses along 1 typical agricultural production, such as km of coast, this means a total replacement coconut plantations. These have an cost of US$ 150,000-250,000 for the houses. average yield of around 1 million Rp. per The damage due to sand erosion might year, so that the value of this land is the take place within a few years, or after present value" of its yield: around US$ decades, depending on how close to the 4,500/ha. Taking a loss of 0.2 m/yr shore the houses and roads are. The (Cambers 1992; data for Caribbean), this depreiation of these constructions, implies that per km of coastline some however, is much lower than what was US$ 90 worth of land is lost. This assumed for bamboo houses and dirt roads corresponds to a total value of US$ 820 of above. Given the replacement costs of land lost over 25 years per km of roads and houses, we assume a coastline. Note that the estimate of 0.2 conservative estimate of a net present m/yr of coast erosion is very value of combined damage to gravel roads conservative: some areas have an erosion and houses in the order of some US$ of several meters per year on average. 50,000 over 25 years with a 10% discount Other costs might be related to some rate. This would be the case if around 2.5% destruction of bamboo houses and dirt of property is destroyed every year. roads. However, given the slow pace of land-loss and given the quick deprecia- Coastal Protection in Areas with Major tion of these constructions, they will not Infrastructure be considered as additional cost items. The destruction of corals has also led to Coastal Protection in Areas with Some sand erosion, beach damage, land loss, etc. Coastal Construction17 in tourist areas. In both Bali and Lombok, this has forced hotels to make major Other areas might be less remote and investments in groined and other might have quite some population in the constructions to reclaim beaches. These coastal stretch of land. There may be investments give often only temporary 22 Coral Reefs: Their Functions and Economic Value Summary of Coastal Protection Assumptions (with a 10% discount rate and a 25 year period): The valuation of the impact of decreased protection due to coral destruction on current and/ar potential.future economic activilies. Tie total costs over 25 years are: - US$ 820 per km of coastline in remote and sparsely populated areas; - US$ 50,000 per km of coastline in areas with stone construction near fhe shore; - US$ 1,000,000 per km of coastline in areas with major iifrastructure (tourism); For our two scenarios per square kilometer of coral reef, this corresponds to: The LOW scenario has a net present value of LISS 25,410/knz of coral reef; The HIGH scenario has a net present value of US$ 550,000/km of coral reef. relief and continuous efforts are necessary estimated that beach restoration measures to prevent the erosion from re-appearing. would cost approximately US$ 30 million One hotel in West Lombok has spent over (in 1984 dollars). Failure to do so would the last 7 years a total of US$ 880,000 (that result in the potential loss of between 6% is $125,000 per year) for restoring their and 18% of tourism contribution to GDP beach stretch of around 250 meter, in ten years time. Also, the Government of allegedly damaged as a result of past Indonesia is currently planning massive coral mining (Riopelle, 1992). Other hotels additional investments (US$ 67.5 million) on Lombok have also made investments, in Bali to prevent beach erosion and though at a much lower scale. In Bali, one rehabilitate damaged beaches", though account gave a rough estimate of total the total area of the proposed project is expenditures over several years of US$ 1 not yet known. million for 500 m. of coastline protection". These examples imply that total costs of 2.5 Sum m ary beach protection per km are US$ 5.Omillion and US$ 2.0 million In this chapter, the functions of coral reefs respectively". On the basis of these have been discussed, and economic examples, a net present value of US$ 1 values for three of its functions have been million per km over 25 years (10% calculated: fishery, tourism and coastal discount rate) for defensive expenditures protection. These values correspond to is taken as a conservative proxy for the the economic costs of the loss of these cost of decreased beach protection due to functions due to coral reef destruction. coral mining and other destructive Table 2.5.1 presents these data for the activities for areas with major tourism HIGH and LOW scenario'. As explained activities. These estimates are in line with before, for some of the most valuable reef accounts from the Caribbean where major functions, it is impossible to put monetary investments have been necessary to values to their losses. However, if the prevent beach loss. Cambers (1992) total net losses of the quantifiable describes two coasts in Barbados that functions alone are higher than the net have been eroding over the last thirty gains to individuals from reef damage, years at an average rate of 0.2 m/year as then that is sufficient reason to arrest the the result of coral destruction. It was reef threat. 23 Economic Analysis of Indonesian Coral Reefs Table 2.5.1: Net Present Loss to Society due to Destruction of 1 km2 of Coral Reef over 25 years (in US$ 1000; 10% discount rate) Fishery Coastal Tourism Others Total Net Protection Losses (quantifiable) HIGH 550.0 503.0 n.a. 1161.9 Scenario 108.9 LOW 25.4 3.0 n.a. 137.3 Scenario I Note that in the LOW scenario - the infrastructure - the coastal protection and situation with little tourism potential and tourism functions form the main minor coastal construction - the main quantifiable losses. These estimates will quantifiable costs of coral destruction are be used extensively in the next chapter, losses in sustainable fishery. In the HIGH where the benefits and costs of several scenario - with some or major tourism threats will be discussed in detail. potential and also with substantial coastal 24 3. Threats to Coral Reefs *c or around the reefs, with the aid of .1 Inrloduction swimmers, sometimes as many as 300 young boys. Scare-line with plastic strips Coral reefs and their associated and a stone weight are jiggled, whereby environments are sensitive to any changes the stone bounces off the coral, driving the in conditions, be it of natural or of man- fish out of the coral towards the net made (anthropogenic) origin. The last (Rubec, 1988)2. three decades have witnessed an unprecedented escalation in human- Net fishing and bamboo trap fishing are induced stresses. These relate to fishery, other techniques that often cause much industry, urbanization, agriculture, and damage, even though these could be rather tourism. Some 29% of Indonesian reefs are harmless, when carried out more carefully. currently in good to excellent condition Gathering of invertebrates and live corals (LIPI-P30, 1996) and the deterioration is on reef flats also destroys the corals, as continuing rapidly. Both natural and collectors typically trample on the reefs anthropogenic threats have been thereby breaking the coral. In addition to extensively studied in the literature. these destructive fishing practices, most Appendix 1 gives an overview of studies reef fisheries close to population centers on many of these threats. are exploited far beyond their maximum sustainable yield, leading to loss of Destructive fishery biodiversity. Several forms of unsustainable fishery Industrialization, urbanization and practices lead to reef destruction. Poison agriculture fishing stuns targeted species that can then be scooped easily and sold live. This Rapid economic development in Indonesia process can kill parts of coral heads as well is causing a different set of threats to reefs. as other associated small organisms. Blast Sedimentation from the discharge of or explosive fishing uses small home-made industrial effluents and domestic waste is bombs, thrown into the water at a selected the prime threat. The turbidity kills the location close to a reef. The explosion stuns corals by blocking sun-light, essential for and kills schools of fish, but also shatters photosynthesis of the symbiotic algae the corals and destroys the habitat where associated with reef building coral polyps. the fish live, feed and breed. Muro-ami Also, pollution of chemicals and heavy fishing consists of setting a deep net near metals destroys the reef ecosystem. 25 Economic Analysis of Indonesian Coral Reefs Dredging of sand and stone for the fish before the miners even started, due to, construction industry, and coral mining for for example, poison fishing. The economic lime production or rock extraction has also analysis on a one-threat, one-square- a heavy toll on reefs. Runoff from kilometer basis is supplemented with an agricultural sources and logging practices investigation of the stakeholders that reap can do great harm to reefs, either through the benefits of the coral destruction. sedimentation or through increases in pesticides and nutrients. The latter leads to 3.2 Poison Fishery algae blooms that kill coral. At a global level, industrialization also leads to global warming, opening the potential for sea- Introduction level rise. This might also affect coral reefs, though the degree is highly uncertain. Fish poison has been produced and used for centuries all over the world (Eldredge, Tourism 1988). The use of poison in Indonesian waters was first mentioned by Rumphius Coastal construction of beach resorts, solid in his biological studies in the Moluccas in and human waste from tourist resorts, boat the 17th century. In his description, roots anchoring and coral breaking by and stems containing rotenone from the inexperienced divers are some of the tropical derris plant were used to narcotize adverse effects of tourism development. fish in order to facilitate their catch For a recent study on tourism carrying (Eldredge, op. cit.). This practice is still capacity, see Dixon et al. (1995). For an going on in some parts of Indonesia, where overview of the literature on tourism- natural poisons are mixed with pulverized related damage, see Appendix I. fish and this bait is handcast over reef flats. The stunned or killed fish are collected by Economic Analysis free-diving (Erdmann, 1995). This chapter will focus on the economics Since the 1960s, however, this small scale and incentives behind five of the most use of natural poison has been important threats to coral reefs in Eastern supplemented with the application of Indonesia: poison fishing, explosive commercial poisons, especially cyanide2 fishing, coral mining, sedimenta- (Galvez et al, 1989). The main users are the tion/pollution, and overfishing. To this aquarium fish trade and, more recently, end, the costs and benefits are described the wild-caught trade in live food-fish. for hypothetical sites of one square Currently, Indonesia is the single largest kilometer where only one single threat is supplier of wild-caught live-fish to the taking place. This means, for example in a Asian food market, with more than 50% of representative coral mining site, that we the total share in Hong Kong and assume that no other threats are taking Singapore (Johannes & Riepen, 1995) and a place. Hence the loss of the fishery total value estimated at US$ 200 million2. function in such a site equals the value of Prices of live-fish are exorbitant in Asian the maximum sustainable yield in that area restaurants where some premium species (minus remaining fishery during and after are sold for more than US$100 per kg. This mining). Therefore, we assume away the section will describe the economics and the possibility that the area did not yield much management options of both the wild- 26 Threats to Coral Reefs caught food-fish trade and, briefly, also the repeatedly (Rubec, 1988). There is some aquarium trade. proof that even a one-time squirt of cyanide on a coral head is enough to kill The use of cyanide both for aquarium fish coral colonies and cause bleaching and for food-fish, is highly destructive, as (Johannes & Riepen, 1995), though this is many larvae, fingerlings and other denied by others. The coral structures stay organisms are killed in the process. Also, intact, but might gradually erode under according to Rubec (1988), aquarium fish physical and biological processes. collectors only select an average of ten Recolonization could take place in the long percent of total stunned fish, taking only run, though is it claimed that effects of the colorful species of interest to aquarists. cyanide could last up to 30-35 years Cyanide exposure has been shown to (Galvez, et al., 1989). Besides, dead corals cause internal damage to the fishes' liver, yield much fewer fish than live corals. intestines and reproductive organs (Rubec, op. cit.). Therefore, most of the other fish Cyanide and its Effects that are not captured, die within months. In fact, this is also the reason that the Techniques Philippine aquarium fish trade has obtained such a poor reputation In poison fishing, cyanide is typically worldwide: most of the ornamental fish dissolved in plastic bottles filled with captured with cyanide will die soon in the water, and squirted into holes of coral aquaria (Hinggo & Rivera, 1991).There are heads. This seems the most common and no indications, however, that cyanide use effective technique, though other methods for live food fish catch is harmful for are used as well (See : Johannes & Riepen). human consumers: the poison is partly There are various accounts on how much excreted and partly converted by the liver cyanide is used in the aquarium and live into a non-toxic substance: thiocyanate. food-fish trade. From the available data, it The remaining quantities of cyanide in seems that cyanide is only a minor cost tissue are below WHO-standards2. On the component in the food-fish trade (see other hand, commercial poison fishery is a below), whereas, in the aquarium fish risky business for the divers especially if trade, cyanide is apparently a major cost compressed air (hookah, SCUBA) is used. component (McAllister, 1988). In one Filipino village of 200 divers, 30 cases of serious bends were reported and Quantities used 10 divers died in 1993 (Johannes & Riepen, 1993). When 1-6 tablets of cyanide are dissolved in a plastic bottle (50-70 tablets per kg) 26, Apart from this, cyanide can also kill parts one filling generally suffices for the of coral heads, especially when applied capture of three commercial-size fish7. Summan of Cyanide Use Assumptions: * The price of cyanide is US$ 6 per kg; * 16 grams of cyanide at a price of 0.1 US$ are used per live fish (restaurant trade); * An estimated 320-640.000 kg/vr of cyanide is sprayed on Indonesian reefs for liiie fish collection. 27 Economic Analysis of Indonesian Coral Reefs Taking as an average three tablets of Destruction of coral reefs and of its functions cyanide per bottle, and 60 tablets per kg, this would mean 16 gram per food-fish. Cyanide tends to kill coral colonies. This is in line with accounts that a Johannes & Riepen (1995) quote research of fisherman needs about 1 kg of cyanide per Dr. Richmond (University of Guam), week and catches around 9-10 groupers a suggesting that coral show typical stress day in the remoter areas8. Given a total responses within 30 seconds of exposure to annual live-fish export for Indonesia of cyanide. Often they die subsequently, 10,000-20,000 mt (see below), the total sometimes after appearing healthy for amount of cyanide squirted on the reefs for several weeks. Soon the bleached corals are food-fish is estimated at some 160-320,000 overgrown by filamentous algae (turf). kge. Coral bleaching in laboratories is reported at cyanide concentrations two hundred Per diver, the aquarium fishery uses thousand. times less the concentration used apparently much more cyanide. Rubec by poison fishermen (Johannes & Riepen, (1988) reports that large ships for 1995). Divers of a tourist live-aboard aquarium fish collection use up to 1250 kg operation in Eastern Indonesia reported of cyanide for a single 10-20 day trips. This that areas that were still untouched one would amount to 1.25-2.5 kg per fisherman year before had turned into fishless and per day', compared to 1 kg per week for partially destroyed terrain after poison restaurant food fishermen. At the same fishing had taken place. It is estimated for time, it seems that currently, there are the Philippines that as much as 33 million many more full-time food-fish divers than coral heads are squirted with cyanide each aquarium collectors currently operating in year (Rubec, 1988). Indonesia. Therefore, we assume here very roughly that the total aquarium trade uses The impacts on the fishery and tourist the same amount as the food-fish business. functions cannot be underestimated. Dead This gives a total cyanide use in Indonesia corals are much less productive in fishery in the order of 320-640,000 kg/year. terms than live corals, though dead corals can still provide shelter and a surface for Price of cyanide algal growth. Tourism will obviously cease in poisoned areas: live-aboard Generally, cyanide is relatively cheap and operations in Eastern Indonesia have more easy to obtain. Fishermen in Ujung and more trouble finding good diving Pandang, for example, purchase it from spots. The coastal protection function will local silver and electroplating industries or probably not be directly affected, as the purchase it on credit from local owners of coral structures stay intact. However, there fish cages31. Retail prices are around are accounts that these structures might Rp.11,000-15,000 per kg (US$ 5-6.8)'2. This gradually erode under physical and is in line with accounts from the biological processes. Besides, the corals Philippines, where prices range in the will not adapt any more to any changes order of US$ 6 per kilogram3, though (e.g. sea level rise). We take here the prices might differ quite a bit depending simplifying assumption that coastal on availabilitye- protection will not be affected at all by poison fishing. On the basis of these accounts, we assume (see Box). 28 Threats to Coral Reefs Summary Assumptions on Effects of Poison Fishing: * Poison fishing partly destroys the squirted coral heads; * The fish productiizity of cyanided reefs is dramatically reduced (for assumptions of the precise losses, see the subsequent sections); * The tourism function will cease to exist; * Biodiversity of both corals and related fish and invertebrates suffers severe damage; * The coastal prol ectionf,nction will not be afected bI the cyanide. Recovery of coral reefs and its functions * recovery of the fishery goes hand in hand with recovery of the corals; Evidence of recovery of corals after * tourism will only restart after full cyanide poisoning is anecdotal, especially recovery (30 years). because cyanide has only been used extensively over the last two decades. One As an example, the destruction and account states that recolonization could recovery of moderately destroyed reefs in take place in the long run, though it is small scale operations is depicted in Figure claimed that effects of cyanide could last 3.2.1. up to 30-35 years (Galvez, et al., 1989). Poison Food Fish Others claim that this period is much shorter, as the substratum is not affected Extent of the food-fish trade by the cyanide use, though recovery could take a very long time in the presence of The cyanide food fish business in other stresses (Dr. J. Post, personal Indonesia has been rapidly expanding communication). over the last couple of years. Johannes & Riepen (1995) estimate conservatively that We assume: the total wild-caught live fish trade in South-East Asia amounts to 20-25,000 * full recovery of the coral reef takes 30 metric ton per year (nearly all with years, starting a year after destruction poison). These figures are based on ends; Figure 3.2.1: Destruction of Coral Reefs and of Its Functions due to Poison Fishing (example of moderately destroyed reefs) 90% 80% coM 60% :c so% 40% D*. 30% 20% 10% 0% time ooral death (%/) coral fishery yield (%) coastalprotectiofunction (%) ukture touism potential (%) 29 Economic Analysis of Indonesian Coral Reefs official import statistics from Hong-Kong * ifour data are correct, only 10% of the and other countries (Taiwan, Singapore, wild-caught live fish trade is reported to the etc.). Indonesia's share in this business is Indonesian customs officially, and the total well over fifty percent of the total (hence, value is underestimated by a factor 40. over 10.000 mt/yr.). Another accounte puts the number for Indonesia alone as Price of Live-Fish high as 20,000 mt. Yet another account' stated that the live-fish trade was a US$ The wild-caught live food-fish trade 200 million business for Indonesia, which concentrates on the catch of groupers and also indicates a total export of 10-20,000 mt coral trout (fam. Serranidae, especially per year, given current export prices. species Epinephelus spp., Plectropomus spp. and Cromileptes altivelis) and of Napoleon The official fishery statistics37 for Indonesia wrasse (Cheilinus undulatus)-. Prices for gives an export volume of 1,522 mt (in live fish in restaurants in Hong Kong are 1993) with a value of US$ 4.7 million. If the very high: Napoleon wrasse sell for as figures given above are correct, this would much as US$ 180 per kg, and the lips of mean that around 90% of wild-caught live- Napoleon wrasse, seen as a delicacy, are fish exports are not officially reported at sold for up to US$ 1,000 per plate the customs and that the total value is (Johannes & Riepen, 1995). Ever since more than 40 times higher than reported in Indonesia has restricted the export of the fishery statistics. However, it may also Napoleon wrasse, the prices have be true that exports have increased increased (Johannes & Riepen, 1995, op dramatically since 1993, so that the official cit.).Highfin groupers (Cromileptes altivelis) statistics might underestimate the exports sell in restaurants for up to US$ 180 per kg, assumed here. For the further analysis, we while other groupers go for US$ 25-50. For assume: the purpose of this report, the term 'groupers' is used to designate all target * the total export-volume of wild-caught live restaurant food fish species, including fish from Indonesia is 10-20,000 mt/year; wrasse. * the corresponding total export-value is currently around US$ 200 million per Johannes & Riepen (op cit.) give a detailed year; account of wholesale prices in various Table 3.2.1: Wholesale prices in Hong Kong (US$) in 1994 wild- aqua- chilled/ Species (common name) scientific name caught culture dead Napoleon Wrasse Cheilinus undulatus 75 n.a. 30 (or: Humphead Wr.) Highfin Grouper Cromileptus altivelis 88 n.a. n.a. (or: Panther Grouper) (or: Barramundi cod) Red Grouper Epinephelus akaara 51 34 8 (or: Greasy Grouper) I Malabar Grouper Epinephelus malabaricus 25 20 8 (or: Estuary cod) Leopard Grouper Plectropomus leopardus 34 22.5 8 (or: coral Trout) I I I Source: Johannes & Riepen (1995). Prices for chilled fish are for Taiwan (Hong Kong prices are lower). 30 Threats to Coral Reefs Summary of Assumptions on Biomass and Yield of Groupers: * The catchable biomass of groupers is 3 mt/km2 in moderately fished reefs and 10 mtRem2 in pristine reefs; * Large-scale poison fishery will harvest the whole catchable biomass ofgroupers; * Napoleon wrasse populations are close to depletion and grouper stocks in Indonesia will be considerably depleted in some four years if current fishing efflrts coninue: * Some 3,000 km2 of pristine reefs are considerably destroyed (a mosaic of destruction) each year by cyanide fishing by poison food fishery; * In moderately fished reefs, the MSY of groupers is I mt/km', whereas in pristine reef, the yield of groupers is estimated here to be 1.5 mt/km'. Asian markets for wild-caught live fish, hence, an average sustainable yield of 1.5 aquaculture live fish and their freshly mt/km. chilled equivalents. The difference in wild caught fish and aquaculture fish is due to On the basis of published growth rates, the fact that the former taste allegedly the catchable biomass is assumed to be better. The Hong Kong restaurant prices three times the sustainable yield (3 are around twice as high as the wholesale mt/kin) in moderately fished reefs. For prices. Besides groupers and Napoleon pristine reefs, this number may be much wrasse, spiny lobsters (Panilurus spp.) are higher as the average size is typically large also caught by free divers and hookah in unfished reefs, though only anecdotal divers using cyanide in moderately fished information is available. We assume as a reefs. The market is primarily export to first guess a biomass-yield ratio of 6.67, so Japan. The prices are not known exactly, that the catchable biomass is 10 mt/km. but seem to be similarly priced (Erdmann, Note that grouper-yields are very site 1995). specific, and very little information is available in general about all of the Biomass and sustainable catch of live fish per numbers. k m2 Actual yield of live-fish per km' In heavily exploited reefs, there are typically very few to no market-sized The sustainable yield of groupers and groupers. However, in reefs without Napoleon wrasse is unknown, though it is overfishing, the sustainable catch of clear that current catches in Indonesia are groupers is reportedly between 7-16% of unsustainable. In fact, Johannes & Riepen total finfish catch39, though percentages (1995) report that Napoleon wrasse exports outside this range are not uncommon have declined due to depletion and large either. Here, we take as a rough working specimens have become especially hard to hypothesis a grouper fraction of 10% of get. According to fish buyers in Hong total finfish catch for lightly and Kong and Singapore, large-scale grouper moderately fished reefs. Taking, as in fishery in Indonesia will become Chapter 2, a maximum sustainable yield commercially inviable in three to four (MSY) for finfish of 10 mt/km/yr, this years. We will therefore assume that the would mean that the MSY4 of groupers is poison grouper fishery basically catches implicitly assumed to be 1.0 mt/km2. For the entire adult grouper population in the pristine reefs we take as a working fishing area. The rapid depletion is not hypothesis a grouper fraction of 15%, surprising given the reported current export levels of 10-20,000 mt/km/yr. In 31 Economic Analysis of Indonesian Coral Reefs fact, if these export figures are correct, the companies for live food-fish (Johannes & biomass assumptions above are of the Riepen, op. cit.). right order of magnitude: assuming, as argued above, that an untouched reef has a The second type, the small scale operation, biomass of some 10 mt/km2 of groupers on the other side of the spectrum takes and that there are some 20,000 km2 of place in less remote areas and is not capital untouched reefs4 (in good to excellent intensive. One or two fishermen go out on condition), grouper stocks will indeed be the reef close to their villages in relatively considerably depleted in four years times. heavily fished areas. They use out-rigger boatlets and goggles. They free-dive Poison food-fishing operations mainly for coral trout (Plectropomus spp.), but also other groupers, Napoleon wrasse There are several types of poison fishing and spiny lobster (Palinurus spp.). They operations going on in Indonesia. The two bring the fish to live cages where they are most characteristic and probably the most again pickedThe ecology and economics of common ones will be analyzed below. both types are quite distinct. Besides these They are: (i) the large-scale operations i operations, intermediate types of Teyot ares di) the arge-scale pions operations exist where the fishermen remote areas and (ii) the small scale ones middleman, who sells it to live-cage in traditional reef fishery areas. Data are owner. Also, small operation with a few mainly from Johannes & Riepen (1995), as divers using ferry-rigged hookahs takes well as from a number of well informed place in some areas. We will focus here, anonymous sources. however, on the two polar cases described operation above. In order to study these markets and the benefits of various stakeholders, the takes place in the remote areas of the ctry,s plie mste pe ar s of atukue rsales prices from fisherman to restaurant are analyzed (Table 3.2.2). These data are Jaya, as well as atolls in Central Indonesia, explained in the text below. Using these such as Take Bone Rate. These operations data as well as figures on operational costs use 'live-hold catcher boats' that are and capital costs, the net benefit to the generally Hong Kong owned. They bring individuals and the social costs to society their cyanide from Hong Kong and use a are calculated. local Indonesian crew of some 20 persons. Some of these boats are based in Ujung Large scale operations Pandang and leave for pristine islands and atolls in Eastern Indonesia where no or In large scale operations, the main very little fishing effort is taking place. stakeholders are the fishermen, the They stay for as much as a month at a time. operators of the live hold 'catcher' boats, Once back in Ujung Pandang, the food-fish the exporters (LFTV or air-freight), the are put into live cages off the coast until Hong Kong wholesalers and the restaurant they are transported to mainly Hong Kong owners. If it is true, as reported, that the by a large Live Fish Transport Vessel total live food-fish trade is some 15,000 (LFTV). Recently, air transport is being mt/yr and that the live-hold 'catcher' boats used more and more instead of LFTV hold about 3 mt of groupers which they because of lower fish mortality rates. In catch during one trip of up to a month Bali alone, there are now ten air-freight with a crew of 20, it is likely that around 32 Threats to Coral Reefs Table 3.2.2: Sales prices of wild-caught live-fish from fisherman to restaurant in US$/kg for large and small scale operations small scale operation large scale operation Itypes of fish coral trout and Nap. wrassel coral trout and Nap. wrassel sales pricel other groupers Highfin grouper other groupers Highfin grouper restaurant owner 60--90 180 60--90 180 wholesaler 25--50 70--90 25--50 70--90 exporter n.a. n.a. n.a. n.a. export agentlive cage 15--20 40--50 boat owner/middleman 15--20 40--50 local fishermen 7 9--11 2 2 Socrs: dlectedfron ErdTrn (1995). Jdxrim & RiesP (1995). AlvorEE (1995) ndvaios axnfms pers. cam. aidown d±srvdicr (stOt dMVefer CESUOMria) 500 'catcher' boats or other similar and benefits per trip are given in Table operations are currently active, and that as 3.2.3. much as 10.000 people might be employed in the business. Sustainable alternative As elaborated above, the total annual Harvest of wild-caught groupers without export of wild-caught live food-fish is 10- cyanide is growing rapidly in Australia 20,000 mt/yr, with a point estimate of and in some places in the Philippines. It 15,000 mt/yr. We assume here tentatively has also started in Indonesia over the last that two-third of this trade (10,000 mt/yr.) year or two, especially in areas close to the is carried out through the large scale live-pans. However, this sustainable operations, although this is not based on practice is less efficient. According to some precise information. At the current rate, fishermen involved, it takes twice as much Indonesia's wild-caught grouper export time to catch groupers this way than with will become commercially inviable within using cyanide in pristine reefs. In order to three to four years (see above). Hence, we compare this sustainable harvest with assume conservatively that the operations large scale poison fishery, we make the have 4 more years to go, and that there are heroic assumption that the same 500 in total 12,000 km of pristine reefs left (see operations are able and willing to switch to above), of which 8,000 km2 will be this alternative. explored by the large operations. It is assumed that the fishermen will earn the This sustainable live-fish operations would amount equal to the opportunity costs of be able to sustain grouper exports over labor in rural areas (Rp. 2000; US$ 0.91) per time, though at a lower rate. With 50% of day after the cyanide fishing operation has the productivity of poison fishery, the 500 ceased to exist. large scale operations will harvest 7,500 mt per year. Note that, in fact, the current Though there is a diversity of semi-large level of export can be maintained and large scale operations going on, we sustainably by having twice as many assume for the sake of simplicity that all people involved, assuming as above that operations are exactly the same. The the sustainable catch of groupers is 2 assumptions are listed here and the costs mt/km2/yr. With an area of 8000 km, this means 16,000 mt per year of sustainable 33 Economic Analysis of Indonesian Coral Reefs Table 3.2.3: Cost and Benefits per Trip with 'Catcher' Boat (in 1000 US$: one trip takes around one month) with cyanide without cyanide costs benefits costs benefits Items sales of grouper 30.0 15.0 labor 6.8 3.4 boat, fuel, etc 5.0 4.5 cyanide 0.4 0.0 SCUBA/hookah 1.0 0.0 side-payment 2.0 0.0 Total 15.2 30.0 7.9 15.0 Profit 14.8 _ 7.1 Profit margin 49% 47% Profit per fish $7.4 $7.1 catch. However, here we will assume that Other costs only the current fleet of 500 boats will be used. Poison fishery involves other costs also, especially to biodiversity and tourism. For the rest, the costs are the same as Biodiversity is particularly important here above, though there are obviously no costs as most areas are remote and have high for SCUBA/hookah-equipment and diversity both in coral and in reef-related cyanide. The hook-and-line gear is fish and other biota. Also, some of the virtually costless. Alse, since this trade is large scale operations take place in marine not illegal, no side-payments have to be protected areas (Take Bone Rate, Bunaken, made. The payments made to the etc.).It is ironic that the large scale divers/fishermen are again Rp. 5000 per operations actually go to these marine live-fish caught. Given the lower parks, because they assume that there will productivity, this is a 50% drop in income. be major quantities of groupers. However, the risk of decompression Enforcement is extremely difficult in these, illness, etc. is eliminated and income could often remote, areas, and seems hardly of be insured over time. concern to live-fish catchers". The Assumptions for Large-Scale Poison Grouper Operations are: * The live hold *carcher' boat (referred to as boat) has a crew of 20 people; * Each trip lasts for a month and has a catch of 3 mi and there are 10 trips per year; * Total mortalirv rate of groupers as 50%: the fishernien collect 4 mit per trip of which 3 mi is safely stored in the ship, of which 2 mr are delivered alive in the harbor; * The fishermen get Rp. 5000 (US$ 2.27) per fish caught alive and the boat gets US$ 15 upon delivery to the LF7V or airport; * The operational costs (including depreciation. fuel, etc.) are US$ 5.000 per trip; * The total costs of SCUBA/hookah-equipneni. compressor, etc. is US$ 1,000 per trip; * The costs of cyanide are USS 400 per trip (US$ 0.1 per grouper caught); * Costs of side-payments (cyanide fishing is illegalJ are US$ 2.000 per trip; 34 Threats to Coral Reefs Tourism potential is limited in most of the 200 divers in the village Marinduque, 30 areas due to inaccessibility. As a working divers got serious cases of decompression hypothesis, we assume that 5% of the total sickness ('the bends') and 10 of them died. of 8,000 km2 has high tourism potential Paralysis from the waist down is common (such as Bunaken), 15% has moderate in serious bends cases: this can be possibilities for (diving) tourism (e.g. Biak) temporal or can last till death. Other and 80% has no tourism potential. With records are less dramatic but also severe opportunity costs of foregone tourism, as (e.g. McManus et al, 1992). On the basis of presented in Chapter 2, we get a present available data, a mortality rate of 1% per value of US$ 369 million for the whole year seems a very conservative first proxy. area. These costs will accumulate over the The typical problem is that divers are too four years that remain for cyanide fishing, often, too long, and too deep under water. if operations continue at the current speed. One anonymous account mentioned cases where people had made up to five Danger to fishermen consecutive 20-30 minute dives to 40-60 meters each day and other cases where The hookah and SCUBA diving that is people made ten 20-40 minute dives to 20- essential to large-scale poison fishery 30 meters6. We have not attempted to operations is extremely dangerous for the quantify the morbidity, invalidity and fishermen. As mentioned before, Johannes mortality, but the implied social costs are & Riepen (1995) report of a case in the substantial. Philippines where in one year, out of the Table 3.2.4: Costs and Benefits of All Remaining Indonesian Large Scale Poison Fishing and their Sustainable Alternative over 25 years with 10% discount rate (in US 1.000.000) with c vanide with hook and line costs benefits costs benefits direct costs/benefits sales of grouper 475.5 680.8 iabour 108.1 154.7 boat, fuel, etc. 79.2 204.2 cyanide 6.3 0.0 SCUBA/hookah 15.8 0.0 side-payment (6.7% of sales) 31.7 0.0 subtotal (drect) 241.2 475.5 359.0 680.6 indirect costs/benefits coastal protection 0.0 0.0 forgone tourism 280.2 0.0 hospital, mortality, etc. n.q. 0.0 biodiversity, etc. n.q. 0.0 quant. subtotal (indirect) 280.2 0.0 0.0 quan. total costs/ben. 521.4 475.5 359.0 {680.8 n6t benefit to society -46.0 321.8 35 Economic Analysis of Indonesian Coral Reefs Mortality rates of divers/fishermen are hook-and-line live grouper harvesting conservatively estimated at 1% per year could be very profitable: using the existing fleet for this purpose gives a net benefit to Economic Analysis for Indonesia society of US$ 321.8 million. The costs and benefits are presented visually in Figure In order to get a flavor of the order of 3.2.2. magnitude of total costs and benefits involved in the combined large-scale Fishermen/divers poison-grouper operations, the costs and benefits for the 'catcher' boats per trip For the divers, cyanide fishing is extremely (Table 3.2.3) will be multiplied by the total hazardous, but very well paid. However, number of trips. We assume tentatively the income can not be sustained over time. that 10 such one-month trips take place per We assume that the same divers will be year and that 500 such large scale employed for the four remaining years of operations are going on47. These data can cyanide fishing, after which they will earn be combined with the external costs to give an income equal to the opportunity costs the net benefit of poison and sustainable in rural Indonesia (Rp. 2000; US$ 0.9 per fishing. The present values are day). In the sustainable alternative, the summarized in Table 3.2.4. Precise fishermen will continue for 25 years. The calculations are presented in Appendix 3. income streams are presented in Figure Needless to say, these are very rough first 3.2.3. guesses on the basis of the scarce From Figure 3.2.3 it is clear that divers information available. with a reasonably long time horizon (e.g. Note that even in the absence of alternative 10%) would have a clear incentive to opt grouper fishery, large scale poison fishery for sustainable fishery if they had the does not make economic sense: the net loss choice. However, as can be calculated, a to society is US$ 46 million, excluding risk-neutral diver would become costs to biodiversity loss and human indifferent between both fishing suffering as a result of decompression techniques at a discount rate of 16%. In sickness. On the other hand, sustainable real life, the trade-offs for fishermen might Figure 3.2.2: Annual Net Revenue and Value of Poison Fishing Compared to Net Revenue of Sustainable Live-Fishing (in mil. USS) 80.0 ;*.* 60.0 (D 40.0 g 20.0 -i 0.0*- - - - - - - - - *- - - *- * - - * * .20.0 . 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 -40.0- tim e net revenue poison fishing - foregone tourism potential net value of poison fishery --x net revenue sust. fishery 36 Threats to Coral Reefs Figure 3.2.3: Annual Net Income of Poison Fishermen and Sustainable Live-Grouper Fishermen (in US$lmanyear) 3500.0 j 5 3000.0- 2500.0 - * 2000.0-- to 1500.0 * 1000.0-- 0 o5000 0.0 -I 1 3 5 7 9 11 13 15 17 19 21 23 25 time -4- income poison fishermen --- income sust. fishermen be much different, as divers are often Costs and Benefits per km2 replaced, or fishermen from local areas are chartered for short periods of time. In this The analysis above can easily be translated situation, given the poverty that most on a per km' basis, by dividing all the coastal fishermen are trapped in, it is very numbers by the area (8,000 km). The hard to have an incentive mechanism in results are summarized in Table 3.2.4. place that could reverse the divers' choice for 'big q uick money' by joining poison Sensitivity Analysis fishing operations. As stressed several times, there is large 'Catcher' boat owners variation and uncertainty about the grouper fishery. Besides, because the For the owners of the (semi) large scale poison grouper trade is illegal, the facts boats, sustainable hook-and-line grouper about the catches, prices and profits are fishery could be an economic alternative as not known with precision either. A well. The current practice is illegal and sensitivity analysis could check how there is a constant, be it small, chance of robust the results are for variations in the willingness to switch depends crucially on assumptions. However, given the margins their outside options: if they have the that exist between the benefits to possibility to move to other countries (e.g. individuals on the one hand and the costs Papua, New Guinea) afterwards, there to society on the other hand, even seems to be very little that can prevent considerably higher benefits would not them from continuing to destroy the reefs alter the broad picture. Besides, where apart from strong enforcement measures. working hypotheses were formulated If, on the other hand, they are firmly above, we have tried to be as conservative located in Indonesia and have little as possible with respect to the social costs alternative income generation for the boat, and to the income generated by the sustainable live-grouper operations sustainable alternatives. For instance, we may be an economically viable option. assumed that poison-free groupers do not 37 Economic Analysis of Indonesian Coral Reefs Figure 3.2.4: Net Present Value of Poison Fishing to Individuals and Associated Losses to Society per A2 of reef in Large Scale Operations (in 1000 US$; over 25 years; with 10% discount rate) 30.0 - 20.0 29.3 10.0 0.0 , net revenue poison fishing loss ftounsm pot ntial fore ne net benel Is of o 10.0- sust inablef ve-gr uper -20.0 fawy -30.0 -40.0 -35.0 50.0 -402 yield higher prices, nor that their survival are other finfish. Poison fishery is assumed rates are greater. Both these conservative to harvest the total catchable grouper assumptions probably deflated the true biomass of 3 mt/km2, though in reality benefits of sustainable grouper catch. free-diving probably does not allow the fishermen to catch some of the deeper Small scale operations dwelling groupers. It is not clear what the level of destruction of the coral reefs is Contrary to the large scale operations, the once they are impaired by poison fishery: small scale poison grouper business takes the only examples in the literature discuss place in or close to fishermen's traditional situations with various threats at the same fishing grounds near their villages. We will time. Due to lack of concrete data, we take present here a cost-benefit analysis for one the hypothetical situation that poison- km' of coral reef, based on a hypothetical damaged reefs have a maximum example of ten menyear of traditional sustainable fishery yield of 7.5 sustainable fisheries (see analogous mt/km/year, which goes gradually back example in Chapter 2). At some stage, to 15 mt/km/year with the recovery of poison fishery is introduced by fishermen the coral colonies4. from a neighboring village. Once all groupers are harvested, these fishermen * A moderatelyfished reef gives a sustainable move on to other reefs further away from finfish yield of 10 mt/km2/year of which the village. 10% are groupers, as well as a sustainable harvest of 5 mt/km'/year of invertebrates; Yields * Live food fishery with cyanide yields 3 mtkm2of groupers, and destroys coral As described above, we assume tentatively heads so that the maximum sustainable as a working hypothesis that in catch of other fish drops to 7.5 mt/km'/year moderately fished reefs with 50% reef flat with gradual recovery over 30 years. and 50% reef slope, the maximum sustainable fisheries yield is 15 Prices mt/km2/yr of which 5 mt/km2/yr are invertebrates, 1 mt/km2/yr are groupers When fishermen sell directly to the live- (and Napoleon wrasse) and 9 mt/km /yr cage owners (i.e. the export agents), prices 38 Threats to Coral Reefs they can fetch are rather high, though 0.09 per day), so that net income per family these depend on their bargaining position. is US$ 4.91 per day. The opportunity cost One account for Ujung Pandang gives Rp. of labor is Rp. 2,000 per day (US$ 0.91), so 15,000 (US$ 7) for red groupers, Rp. 20,000 that net benefits are 80% of gross income. (US$ 9) for highfin grouper and Rp. 25,000 (over US$ 11) for Napoleon wrasse'. If Once the corals have been impaired by reefs are further away from the live cages, cyanide, the effort level of the sustainable a middleman might be present who buys yield at 10 menyear drops to 6 mt/km/yr the fish from the fishermen and sells it to (2.55 kg/family/day). The costs stay the the export agent. In this case, the same, so that net income isUS$2.47 per fishermen get a price close to that of the day. This means that net benefit is now a hookah divers of the live-hold 'catcher' smaller fraction of its gross value than boats'. This is in line with accounts that before, as more effort is needed for the fishermen were offered prices of Rp. 4,000- same catch (the rent drops). Total net 8,000 (i.e. US$ 1.8-3.6) per piece of 0.5-1 kg benefits become US$ 3,600 for the 10 depending on the species of grouper (i.e. menyears (60%). Summarizing these on average around US$ 3.5/kg). In other assumptions, we get: countries, these prices might be quite different". However, we will stick to the * The net benefit of sustainable fishery is case without middleman, and we will US$ 12,000 per kM2 assume that the average price of all * The net benefit drops to LIS$ 3,600 per kM groupers and Napoleon wrasse is US$7. after poison fishery has taken place; * Net income drops from US$ 4.91 per day to * In Indonesia, fishermen in small operations US$ 2.47 after poison fishery. get on average US$ 7/kg for groupers. Poison fishermen Hypothetical example Fishermen from the nearby village in our Assume the situation of a reef where no hypothetical example will harvest the overfishing takes place. The reef is being catchable biomass of 3 mt/km2 of groupers sustainably fished at the optimal level of within a few months with free diving (very effort by 10 menyears. This level of effort strenuous). We assume conservatively a might come from more than a hundred grouper mortality rate of some 33% during subsistence fishermen each catching part- collection. The dead groupers are sold for time for some months per year, or from 10 the normal price of US$ 1/kg (assuming full-time fishing families. We assume that they have no equipment to preserve the at a certain moment, fishermen from a fish freshly chilled). Taking a price per live nearby village fully exploit the grouper grouper of US$ 7, we therefore get a gross stock using cyanide. Before the cyanide income per year of US$ 15,000. Though it destruction, sustainably fishery yield was does not take the cyanide fishermen the 15 mt/km2/yr at an average price of all whole year to collect this catch, we assume produce of US$ 1/kg, as explained in that they are not involved in other fishing Chapter 2. Therefore, gross income is US$ activities for the rest of their time, 1500 per year per fisherman (US$ 5 per therefore, their opportunity costs of labor day). The costs are assumed to be Rp. for the divers is US$ 1200, the net benefit 60,000 (US$ 27) per family per year (US$ 39 Economic Analysis of Indonesian Coral Reefs Figure 3.2.5: Annual Net Benefits of Fisheries With and Without Poison and Hook-and-Line Alternative (100US$; per km2) 16.0 14.0 o 8 12.0 M 10.0 8.0 - Z r 6.0- ;4.0 2.0 0.01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 time net revenue sustain. fishery -U--net revenue of total fishery w.poison ----net revenue of total fishery with h&I they would have had with sustainable hook-and-line grouper fishery is also fishing. considered (to be discussed next): Other costs for cyanide fishermen are the . cyanide and capital and operational costs. Sustamable hook-and-line grouper fishery Cyanide costs US$ 0.1 per grouper (see There are several sustainable alternatives above). If the average body weight of for the poison live-grouper catch. One is groupers is 1 kg, this would imply a total grouper aquaculture, which is a difficult cost of US$ 200. The other costs are mainly and capital intensive business (see for an a boat with out-board motor (goggles, analysis, Johannes & Riepen, 1995). The some life-nets, etc. are often hand made) other one is hook-and-line grouper fishery, The total annual costs (capital, though other non-destructive techniques depreciation, etc.) are US$ 300 per boat also exist. This is carried out currently in per year. We assume that for the activity of some places in the Philippines, Indonesia the outside fishermen, two boats will be as well as in Australia (where poison used)2. Hence: fishery bans are well-enforced). For . Gross revenue of poison fishing is U examples of sustainable fishing techniques 15,000 per kmn' for live-grouper fishery, as well as prices . pr and exports in Central Sulawesi, see * Cyanide costs are estimated at US$ 200 to Subroto & Subani (1994). collect the entire grouper stock per km; * Other capital and operational costs total Here, we will concentrate on the hook- US$ 600 per km2for this operation; and-line technique, where a bait (typically * Opportunity costs of total labor effort for groundscad) is attached to a hook and a small-scale poison fishing per km2 is US$ small stone and lowered at some 20-30 2400 (this effort will harvest the entire meter. The baited groupers are brought to grouper stock). the surface, where their swim bladder is decompressed with the use of a These fishery benefits and costs are hypodermic needle and kept alive in cages depicted in Figure 3.2.5, where sustainable or pens (Marinelife, 1995). A closed season 40 Threats to Coral Reefs or a refuge can help promote the costs are minimal. We assume here that for sustainability of the catch (see above). the sustainable operation, the fishermen need, besides their own out-rigger boats, This technique is used more and more in one out-board motor boat (to bring fish to Australia for their rapidly growing the LFTV, etc.): costs as above US$ 300 per sustainable live-grouper trade. An year. The other direct costs are assumed to experiment in the Philippines was carried be three times as high as before: Rp. out where local cyanide fishermen were 180,000 per person per year (US$ 81.8), due trained to use hook-and-line grouper to extra material, such as needles, and the fishery. A philanthropist helped them annual costs of the construction and financially in the first two months to build maintenance of live-cages. Opportunity large live cages and to learn the hook-and- costs are as above. The remaining fishery line technique. Since then, the villagers, yields are US$ 14,000/km (with US$ who used to move with their family from 1/kg)'. The two months of learning mean one place to another, have stuck to the new that the fishery yield in the first year is sustainable technique in the same location only 83% of US$ 14,000 (10/12). Thus: (Dr. V. Pratt, personal communication). For 10 people, this would imply * A sustainable catch of 1 mt/km/yr of opportunity costs of labor of two months groupers can be achieved with 500 days of (no fishery yield in this period). The capital hook-and-line fishery; gross revenue will be costs for wood and small mesh netting are around US$ 5,000 plus two initial months in the order of US$ 1000, which of learning and cage construction; corresponds to annual costs (interest, * The remaining fishery yields US$ 10,800 depreciation) of US$ 200. in the first year and US$ 14,000 thereafter; * The direct costs of total fishery (including This hook-and-line technique is more labor sustainable live-fishery) are US$ 818 and intensive (it takes 2-3 times as much labor the opportunity costs are US$ 2727; time)' but it can be carried out in a sustainable way with either a closed A closed season or a sanctuary can help season or an area closed for hook-and-line promote that grouper fishery is sustainable. grouper fishery. For our hypothetical Costs and benefits of small scale poison example, we assume very conservatively fishing that 2 groupers can be caught per person per day, so that a total of around 500 On the basis of the data presented, net fisherman-days are needed for the benefits are calculated of three fishery sustainable catch of 1 mt of groupers (see options: (A) 'fishery with poison for live- above; 1 grouper = 1 kg). With our fish', (B) 'sustainable fishery (no live-fish), assumption of 10 menyear per km2, the and (C) 'fishery with hook&line for live remaining effort can be used for other fish'. Appendix 4 gives all the cost items. types of fishing in the same area to catch The loss of other functions, such as the remaining 14 mt/km2/yr". If we take biodiversity and coastal protection is the same price per grouper (US$ 7) and the assumed to be the same as for large scale same mortality rate (33%), gross revenue poison operations. For tourism, we make of hook-and-line fishery will be US$ 5,000. the same assumptions as above6. Note that Apart from the two initial months of recovery of fishery, coastal protection and learning and constructing the cages, the tourism was presented above in Figure 41 Economic Analysis of Indonesian Coral Reefs Table 3.2.5: Present Value of Costs and Benefits of Small Scale Operations of Poison Fishery and Sustainable Alternatives (in 1000 US$; per km2; 10% discount rate) fishery with poison sustainable fishery sustainable fishery for live-fish (A) (no live-fish) (B) with live-fish (C) cost benefit cost benefit cost benefit I groupers yield 13.6 9.1 45.4 cyanide 0.2 other costs 0.5 0.2 5.2 opportunity labour 2.2 1.7 1.7 2.9 13.6 1.8 9.1 6.8 45.4 10. 7.3 386 H other fishery yield 72.3 127.1 125.0 other costs 1.9 2.3 2.3 opportunity labour 19.8 23.1 23.1 subtotal other fishery 21.7 72.3 25.4 127.1 25.4 125.0 net benefits othrs 50.6 101.79. III other c&b society tourism 40.8 coastal protection 0.0 biodiversity, etc. n.a. 65.5 86.0 27.2 136.2 32.2 170.3 3.2.5. The data are summarized in Table able and destructive practice might still 3.2.5. occur in practice. Note that benefits are highest in case (C) Cyanide fishermen 'fishery with hook & line for live fish': US$ 138,100. The net loss to society of poison The fishermen from the nearby village fishery versus sustainable fishery is US$ scoop the catchable biomass of 3 mt/km2 of 88,400 (US$ 108,900 - 20,500) per km2. It is groupers out of the area, earning in total a interesting to see that most of this net loss gross income of US$ 15,000 within a year. is due to the loss in the 'other fishery' that If two fisherboats (direct costs of around suffers from coral destruction. Note also US$ 800 per boat) with two or three men that the net benefits of grouper catch is 3.6 on board are involved in this business, times higher in the hook & line case (C) they each earn at least twice as much with than in the cyanide case (A). Note that this considerably less effort that their income of is much higher than in the large scale US$ 1,200 in the sustainable situation. operations, because there the 8000 km2 was When they move on to different reefs in sustainably harvested. Instead we the area every year, they continue to have assumed that grouper catch was confined (C) over and above sustainable fishery (B) to 500 operations. Again, unsustainable is US$ 29,800. Therefore, it is impossible to practice has lower net benefits, even in the make the cyanide fishermen better-off with absence of sustainable live-grouper catch, sustainable practices, as long as they are as shown in Figure 3.2.6. The stakeholder allowed to move around and enforcement analysis will show why the non-sustain- is lax. 42 Threats to Coral Reefs Figure 3.2.6: Present Value of Net Revenue of Poison Fishery and Associated Losses to Society of reef in Small Scale Operations (per km2; In 1000 US$; discount rate 10%) 20.0 100 S00 =,0 ID Or- 1. fCt.l re fb3 r100 -400 -4oo -406 -58.3 Other fishermen that gives value-added to coastal communities. The other fishermen are big losers in the case of poison fishery. Total net income Aquarium fishery from one km of reef in present value terms is a mere US$ 70,400 in the case that In the Philippines, it is estimated that there their reef is affected by poison (case A). In are some 4000 aquarium fish gathererss. the case of sustainable fishery, the total net For Indonesia, no such data are available, income in present value terms is US$ though the numbers are probably even 133,700 (case B: sum of I and II). Hence, higher. Riopelle (1995) states that in North per full-time fishermen, income drops (in West Lombok alone, over 250 people were present value terms) with more than 36% involved in the aquarium fish collection. from net benefits of US$ 13,700 to US$ Though ornamental fish can be caught 8,800. On the other hand, the investment to with small nets, cyanide seems the most learn hook & line live-fishery and to cost-effective way of collecting them construct the live cages during two months (Riopelle, 1995). This is a rather damaging is well worth the costs: the additional net development for the whole industry, but in benefits are US$ 2,900 per full-time particular for the Philippines, once a leader fishermen in net present value terms. This in the global aquarium trade business. This corresponds to a increase in net present country started to get a bad reputation in income of some 22%. the eighties, because of the use of cyanide (Hinggo & Rivera, 1991), though still an Rest of Society estimated 80-90% of collectors in the Philippines use cyanide. The rest of society will clearly win from a shift away from poison fishery. In the first Aquarium fish exports from Indonesia place, tourism potential will go up, the using cyanide seems to be expanding benefits of which are estimated at some (Erdmann, 1995). Therefore it seems a US$ 40,800 per km2 in case of a weighted matter of time, before the Indonesian average of tourism potential7. As in the aquarium fish gets a similar reputation as case of coral mining, societal loss due to the that in the Philippines. Aquarists are cyanide is much more in famous tourist rightly concerned about the effects of areas. Besides tourism, other costs of poison: the ornamental fish die typically cyanide are biodiversity loss, etc. The rest within months of purchase, because of of society will also clearly gain from a internal damage due to the cyanide (see sustainable hook & line live-fish industry above). Besides, more than 80% of the 43 Economic Analysis of Indonesian Coral Reefs aquarium fishes die throughout the chain Christie et al. (1994) report that traditional from collector to the marine hobbyist fishermen in one location in the (Rubec, 1988). Philippines earn around US$ 44-66 per month compared to US$ 100 for aquarium Riopelle (1995) states that most aquarium fishermen. However, a recent study by fish collectors use compressors or SCUBA Syukur et al. (1994), discussing the equipment. This is also indicated by aquarium fish market in Southeast Maluku Galvez et al. (1989). Hinggo & Rivera and Sorong (Irian Jaya)', gives a less rosy (1991) indicate that there are two picture: lack of knowledge of handling, operations: (i) individual shallow water marketing and transportation to operations with free diving, and (ii) deeper international airports local fishermen water operations with compressors and would not earn more than a mere Rp. hookah-diving and with 8-12 divers. This 20,000 (US$ 9) per month with aquarium. is analogous to the live grouper-catch However, this situation is very site- described above, except that the aquarium specific, and probably mainly dependent fish operations stay closer home and on transportation possibilities. In Biak probably return daily to the harbor. (Irian Jaya), aquarium fishery declined Riopelle (1995) reports only the larger type dramatically after international Garuda of operation (with 5 SCUBA-divers on flights discontinued their fuel stop-over board). The boats go out apparently to there. This also shows that getting collect aquarium fish one week per month environmentally-friendly high-value for 10 months of the year. fishery from the ground is difficult and requires patience and knowledge of local A short economic analysis of the circumstances and market-opportunities. ornamental fish collection on West- Lombok is given by Riopelle (1985). He The aquarium trade will not be discussed reports that fishermen receive on average further for two reasons: (i) from the above Rp. 5,000 (US$ 2.25) per fish, but for some description is appears that the poison Trigger fish, they can receive up to Rp. aquarium fish trade is in many ways rather 40,000 (US$ 18.20). Riopelle shows that the similar to the live food-fish trade, net present value from aquarium fish especially the smaller and medium size collection is as high as that of all other operations; therefore, the aquarium fish coral reef fisheries together. He shows that trade gives, in its impacts, in its incentives the net present benefit (at 10%) of and in its sustainable alternatives, a picture aquarium fishery in West Lombok is some rather similar to that of the analysis for US$ 5.5 million, with annual export of US$ groupers above; and (ii) it seems that the 0.8 million. If we assume roughly that 2000 live grouper trade is at the moment much aquarium divers are active in Indonesia, more important in economic terms: taking half the number of the Philippines, this the above figures, the live-grouper trade could amount to a business in Indonesia appears to be at least three times as big as with an annual exports" of around US$ 32 the aquarium fish trade, and probably million and a net present benefit value of even much more. some US$ 42 million. 44 Threats to Coral Reefs 3.3 Blast Fishing only one arm is apparently a reliable indicator of dynamite fishing (Alcala & Gomez, 1987). Introduction Though forbidden in Indonesia and Blast fishing (or explosives fishing) is one elsewhere, and despite the dangers, home- of the most destructive anthropogenic made bombs are still a very popular threats to reefs. A hand-made bomb is fishing 'gear'. Close to the town of Biak dropped into coral areas, killing or (Irian Jaya, Indonesia), bombs are timed to stunning entire schools of reef-fish and coincide with the noise of arriving small pelagics. These fish can then be airplanes, so as to avoid detection (Muller, scooped up or gathered by free-diving. 1995). In other coastal areas, there is little Introduced in many areas in the chance of being caught and several Philippines and Indonesia by the Japanese explosions can be heard per hour'. It is not troops in WW-II using hand grenades, it clear how many fishermen use explosives. became a popular fishing technique of Rubec (1988) states that in the Philippines, local fishermen as a way to earn money the 50% of fishermen use bombs at least part easy way". Nowadays, it is sometimes the of the year, though Pauly et al. (1989) state only way for fishermen to earn enough that in Lingayen Gulf, this number is only money to feed their families. The 3-4%. Besides the small scale blast fishery, gunpowder used to come from old WW-II there is a considerable large scale ammunition shells, dug up by the explosion fishing fleet, mainly operating fishermen. Presently, bombs are often from Ujung Pandang with fishing grounds made with chemical fertilizers, such as often in Eastern Indonesia. ammonium/potassium nitrate (NHNO,; KNO). Sometimes, dynamite obtained Galvez et al. (1989) describe socio-cultural from police and military personnel or from aspects of blast fishery in the LingayenGulf mining companies and civil engineering area (Philippines). They point specifically projects is used2. to the local acceptance of this fishing technique, because almost all members of Explosives fishermen hunt specifically for the community benefit from it: poor schooling reef fish and pelagics. However, families often get a handful or more of the the blast also kills many other species, harvest of blast fishermen. With peak especially with air bladders, as well as catches, a fiesta is celebrated by the whole many larvae, juveniles and inedible community, attended also by members of species. The explosion often shatters the the town police, the constabulary and the stony corals to pieces, especially when the coast guard. Also, other fishermen who do explosion occurs close to the reef bottom. not use explosives are allowed to A beer bottle-sized bomb typically accompany the blast fishers, sometimes in destroys an area with a diameter of 2-3 exchange for part of the catch that the non- meter (McManus et al. 1992). In this way, blast fishermen trawl in the dynamited the live coral cover has been reduced with area. 60% due to blast and cyanide fishing in the Philippines (McManus et al.; 1992). Fishermen themselves can also get hurt. In coastal localities, the presence of men with 45 Economic Analysis of Indonesian Coral Reefs Explosives and their effects these records, we will assume here very roughly as a first conservative guess a Damage to Corals, Fish and Fishermen factor four difference in maximum sustainable yield between heavily blasted A beer bottle bomb appears to shatter to reefs (75% destroyed or more) and intact pieces stony corals in an area of some 5 m' reefs. Hence, (diameter 2.5 m) and a one gallon sized bomb destroys corals in an area of around * Reefs destroyed by explosives are assumed 20 m2 (diameter 10 m)64. The area in which to be four times less productive in terms of most fish with air bladders are killed by an max. sustainable yield than intact reefs. explosion is many times greater than this (McManus et al. 1992). Alcala & Gomez Tourism, Coastal Protection and Other (1987) quote findings that four of the five Functions genera tested of Pacific Ocean fish with air bladders were killed ca. 16 meters away The tourism industry holds a great from a bomb with some 4 kg of explosive promise for alternative income generation charge and that five genera of fish without in reefs that are not too remote. However, air bladders all survived at this distance. even sporadic blast fishing can kill the Translating this, it suggests that a bomb reputation of a SCUBA-area for divers. destroying corals in an area of a diameter Divers who happen to be in the vicinity of of (3 meter would kill most fish with air blast fishermen can feel a thud on their bladders in an area of at least 203 meter and body and can even die. The coastal probably much more65. Human hazard: protection function will suffer over time one in every 5-6 dynamiters in three with the destruction of the stony corals, Philippine localities has either lost one or after a period of time when enough coral two arms or died instantly.(Alcala & are left to prevent sand erosion. Our Gomez, 1987). working hypothesis is that that the coastal protection function starts to be affected Fishery once 25% of the corals are destroyed and that function will decline linearly, reaching Blasted areas have lower fish biomass and zero when all corals are destroyed67. The fewer fish species, partly because larger dynamics of this process will obviously reef fish can not find shelter any more in vary greatly with the local circumstances, the destroyed reefs, making them an easy and are very difficult to generalize. Other prey for pelagics. Also, less demersal functions, such as biodiversity and plankton is generated by coral rubble as research, will also be severely impaired by compared to that found among healthy bombing: fish abundance and density are corals (Alcala & Gomez, 1987). McAllister dramatically lower in blasted areas6. (1988) suggests that reef productivity declines from 13-18 mt/km'/yr for reefs in * In areas with blasting, there is assumed to good to excellent condition to 3 be no coastal tourism; mt/km'/yr for reefs in poor condition, often as a result of blasting. Rubec (1988) * The coastal protection functon will start to suggests a difference of a factor five or so be affected once 25% of stony corals have between yields of non-destroyed and been destroyed and decrease linearly, heavily blasted reefs". On the basis of reaching zero when no corals are left 46 Threats to Coral Reefs Figure 3.3.1: Destruction of Coral Reefs and of its Functions due to Blast Fishing 90% 80% 70% e~60%.. 50% 40% &30%. 10% 0%/. 0 - N Q) LO W0 ( r- C0O~ 0 - R' CM C. -q (0 rLO~ ~ ~ 1 -NN CM CQ CM time -4--coral destruction (%) -- coral fishery yield (%) -a-- coastal protection function (%) -- future tourism potential (%) Recovery Economic Analysis of Explosives Coral recovery after blasting can be Fishing extremely slow. Alcala & Gomez (1979) On the basis of factual information as well mention that 38 years are thought to be as our own tentative assumptions, a required for a reef to recover to 50% hard hypothetical example for one km of reef coral cover. This may even be an will be constructed in order to gain a underestimate of the time required: certain rough first insight into the economics and reefs in the Philippines have not recovered stakeholder analysis of small scale blast significantly in 9-10 years following the fishing. As before, we consider only one blasting'. This may be due to the fact that threat at the same time, so we assume that the rubble can move back and forth with no poison fishing, no overfishing and so the current, making recolonization forth are taking place at the same time in difficult. Also, recovery of fishery is also the one km' area. The economic analysis slow. will be carried out over a 25 year time Christie et al. (1994) present a comparison horizon. of recovery after overfishing between two Philippine islands, where sanctuaries were established. The relatively intact reef, in There are several types of blast fishing Apo island, with a total live coral cover of operations. Erdmann (1995) describes 64% and a mortality index of some 25%, vessels of around 10-15 meter with a crew had an increase in fish abundance of 173% of some 10-14, embarking on week-long in one year7. The other island, San trips to patch reefs or fringing reefs of Salvador, with a total coral cover of 32% uninhabited islands around the and a mortality index of 51%, witnessed an Spermonde archipelago (South Sulawesi, increase of only 43% in two years. Besides, Indonesia). Their weekly profit is fish abundance was already more than reportedly some US$ 2,800-4,650 per week. three times higher in Apo to begin with. 47 Economic Analysis of Indonesian Coral Reefs Given the relatively low price of the fish, * In our hypothetical example, we this implies a catch per week in the order concentrate on small scale operations of 5,000-10,000 kg71. Galvez et al. (1989) (two fishermen); such operations make describe small scale operations with one one-day trips, using one bomb per day; 'diver' who tries to detect schools of fish * We assume that on average one bomb is and one 'thrower', going out for a couple used per day per kin2; this can either be of hours per day. Both scoop and free-dive done by one full-time operation or many for the fish after the explosion, possibly part-time operations; helped by some others. It is these small scale operations that we will investigate Price of Fish further in the remainder of this section, as the large scale operations are probably Explosives fishermen catch especially rather similar to those of poison fishing. schooling reef fish, such as fusiliers (Caesio Our choice does not imply that large scale spp.), surgeon fish (Acathurus spp. and Naso operations are less of a problem: in fact, spp.) and rabbitfish (Siganus spp.), as well recent information suggests that the large as pelagics, especially mullets (Mugilidae), scale operations might be much more jacks (Carangidae) and sardines (Clupeidae). problematic in Indonesia, contrary to the The price of fish caught with bombs is Philippines where the small scale considerably lower than when other operations are much more widespread. techniques are used, because they get stale more quickly and typically have broken Frequency bones. Information sources in Biak The blasting frequency can be extremely (Indonesia) mentioned a price of high, as mentioned above. McManus et al. Rp.1000/kg of such fish, 45% less than the 1992) report the occurrence of 10 regular price there (around Rp.1800/kg). Other accounts have also indicated a lower explosions per hour in an area of 2-3 km in Bolinao (Philippines), which corresponds price, but with a less dramatic difference4. to some 2-5 blasts per km2 per day (taking On the basis of combined information, we 6 hour fishing days72). After rumors of assume roughly that blasted fish cost one- tightened enforcement spread, this number third less than other fish. So: dropped with 90%. Christie et al. (1994) Blastedfish have a price 33.3% lower report 3.2 bombs per day on the west coast than the 'normal'price. of San Salvador Island (Philippines), an area with some 3-4 km2 of coral reef. After Costs of Explosives Fishing the introduction of community-based management, only a single blast has Bombs are often hand-made by filling a occurred. Note that in the small scale beer-bottle with explosives charge and operations, often only one bomb is used sand and using a wick and a blasting cap. per day"3. Taking these numbers as a yard- On the basis of different sources of stick, we assume conservatively in our informations, we tentatively estimate the hypothetical example that one bomb is price of a beer bottle bomb to be US$ 1. used per day per km2, and we assume no Other costs are typically the same as in bombing in case of appropriate small scale fisheries without explosives. enforcement. As in the previous sections, opportunity costs are taken to be Rp. 2000 per person 48 Threats to Coral Reefs per day. The other daily costs are capital times higher than that of a largely and recurrent expenditures for an out- destroyed reef. On the basis of this board motor boat, for petrol, nets and ice. combined information, we take that the In this hypothetical example, these are yield per small scale blast fishing operation roughly taken to be Rp. 4800 per day. This is 30 kg of reef fish and small pelagics for gives: intact reefs and 7.5 kg for largely destroyed reefs. The 7.5 kg is the yield at * A beer bottle sized bomb costs US$ 1. which fishermen are indifferent between * The opportunity costs of labor is in total using explosive fishing and alternative Rp.4000 (UJS$ 1,82) for two fishermen; income generation, given the opportunity * The other costs (boat, petrol, ice, nets, costs of labor of Rp. 2,000 per day7. etc.) are taken to be Rp.4,800 (US$ 2.18). * The yield per bomb is 30 kgfor intact reefs and 7.5 kg for heavily bombed Yield areas. Non-blast fishermen quote that the reason for explosive fishing is to "earn money the Othefishey easy way" (Galvez et al., 1989). Andersson The remaining fishery will undoubtedly (1995) reports that in Mafia island suffer from the blasts: non-targeted fish are (Tanzania), dynamite fishermen catch in 2 wiped out, juveniles and larvae are killed days as much as other fishermen catch in and, probably most importantly, the around 20 days. McManus et al. (1992; p. resource base itself is destroyed. In order 12) reports that blast fishers have "returns to keep the analysis as simple as possible, of ten times or more on the investment in we assume here that blast fishing does not the blasting device, and substantially lead to overfishing and that the remaining better catches per hour than with catch is at its maximum sustainable level traditional gear". Own observations have (MSY) every year. The 'other' fishery yield indicated that in Biak (Indonesia), where will therefore be the MSY, given the level reefs are in moderate condition76 one bomb of destruction, minus what the blast allows the catch of some 10-20 kg of fish fishermen have caught. The MSY's for the (US$ 5.5-11), whereas traditional grill nets different levels of reef destruction have would allow these values of sales only in been discussed in Chapter 2. The total very good days". McManus (personal 'other' costs and the total opportunity costs communication) stated that in heavily of labor will change over time due to the overfished reef areas of the Philippines, fact that the total level of optimal effort blast fishermen catch l0 kg in two hours, declines over time with the destruction of whereas traditional fishermen catch only 1 the resource base. kg in six hours, though sold at a higher price. * The blast fishery yield and the remaining Note that the above accounts are all for fishery catch together will equal the partly or heavily damaged reefs. We maximum sustainable yield for the assumed that intact reefs have a yield four prevailing level of coral destruction: 49 Economic Analysis of Indonesian Coral Reefs Table 3.3.1: Present Value of Costs and Benefits of Blast Fishing and the Sustainable Alternative per km2 (in 1000 US$; 10% discount rate; 25 years) fishery in presence of sustainable fishery blast fishing (no blast fising) cost benefit cost benefit I blast fishermen yield 28.2 explosives 2.7 other costs 5.9 opportunity labour 5.0 subtotal blast fishing 13.6 28.2 not benefts blasting 14.6 q II other fishery yield 28.2 136.2 other costs 0.5 2.5 opportunity labour 5.1 24.8 subtotal other fishery 5.6 28.2 27.2 136.2 not benefits others / 22'6 108.9 I other c&b society tourism 481.9 coastal protection 193.0 biodiversity, etc. n.a. total 694.1 6.4 27.2 136.2 Saroa Hyzth~dearoe a teamis d ctorderatoin the fact (sp Givw0 d 1 1989. MdWvixs s d.. 1992 AOa& Gan& 1987; Pady a d., 7989; Rutsc 1988. a-d vaia pas. wrn. Costs and Benefits to Society overfishing occurring once the resource base has been partly destroyed, slightly Blast fishing destroys the very habitat that changing the results. Here, we have the fish are directly or indirectly deliberately chosen for 'optimal rent' dependent upon. Therefore, it is no fishing of the remaining fishery. This surprise that explosives fishery generates a means that it is assumed, for simplicity, net loss to society, compared to non- that the redundant fishermen will find destructive fishing. This is shown in Table alternative sources of income. Note that all 3.3.1, where the present value of costs and data are in man-year. Given the benefits of blast fishing and the sustainable subsistence characteristics of much of the alternative are given per km2 in the case of artisanal fishery, this might actually imply low tourism potential. that quite a large number of fishermen are involved who spend only part of the time The net loss to society due to blast fishing and part of the year in fishery. is US$ 92,200 per km2 of reef (US$ 108,900 - US$ 16,700). Both the sustainable fishery The main cost of blast fishing in the case of and the remaining fishery take place at the low tourism potential are the net forgone level of maximum sustainable yield for benefits of sustainable fishery (see Figure remaining fishery, this implies a very low 3.3.2). In the case of high tourism potential, level of effort: only one man-year after year the coastal protection and tourism value 10. In reality, we will probably find 50 Threats to Coral Reefs Figure 3.3.2: Net Present Value of Blast Fishing to Individuals and Associated Losses to Society per km2 of Reef (Scenario: HIGH; in 1000 US$; over 25 years; 10% discount rate) 50.0-. 0.0 I , -50.0 net pnvate loss of loss of 1oregon -1000. . benefits tourism coastal sustainable -150.0 from blast rotection fishery a T fishing income M -200 5 -250.0 - o, -300.0 -350.0 - -400.0I -450.0 - -500.0 - become the main cost of blast fishing. especially with overfishing, would only Given the large net loss to society from give them income close to the opportunity blast fishing, one might wonder why this costs of labor. Figure 3.3.3 illustrates this activity continues to exist. In order to trap. Note that if one fisherman decides answer this, a very brief stakeholder not to use bombs but his neighbors do, this analysis will be carried out. fisherman is even worse off: he does not reap the benefits, but does incur the costs. Blast Fishermen This prisoner dilemma situation probably increases the incidence of blast fishing The small-scale blast fishermen are, in the considerably. At a low discount rate, such beginning, often attracted by the ease with as the 10% we use throughout, a which they can earn money (Galvez et al., traditional fisherman would have little 1989). Later on, it becomes much more incentive to change. However, at a higher difficult to have the same success, but by rate of some 23%, it starts becoming that time, the resource-base has been attractive for a fisherman to shift to blast destroyed, and traditional fishery, fishing. Figure 3.3.3: Annual Net Income of Poison Fishermen, of Other Fishermen (in Absence of Blasting) and Opportunity Cost of Labour (per manyear; in US$) 2500.00 2000.00 --- net income sustain. fishery 1500.00, S--net income blast fishery 1000.00 ---opportunity cost of labour S50000.... 0.00- 1 3 5 7 9 11 13 15 17 19 21 23 25 time 51 Economic Analysis of Indonesian Coral Reefs instance, sites where coral rock mining 3.4 Coral M 1i1111n took place ten or more years ago, show very slow recovery of the mined areas (less Hard corals have long been used for than 10 cm). Also, current live coral cover building material and for the production of is still very low (<1%)0. Mining also lime, as well as in the ornamental coral decimates the reef fishery in these areas trade. For the Philippines, Rubec (1988) and might even lead to an irreversible gives an estimate of 48,000 mt/yr of stony collapse of the reef ecosystem. Beside these corals gathered, of which a considerable direct effects, unintended off-site impacts portion is exported as ornamental coral, by of mining, such as sand-erosion, loss of far the largest exporter (92%) of live coral land, sedimentation, etc. are often severe". to the United States, itself the world's Some hotel owners in Bali and Lombok largest importer. Exports totaled more invest over US$100,000 annually to protect than 420,000 pieces in 1993. Dead coral beaches prone to mining-induced beach exports from Indonesia to the USA erosion. Collection of ornamental coral amounted to an annual average of some rocks (live rock) could, in principle, be 642,000 pieces over the last five years. The done in a sustainable way without much total value of this trade in, unfortunately, damage, though there are reports on not known8. Nor is it certain whether impacts of such activities as well (Wells & these figures reflect the corals collected in Alcala, 1987). Indonesian waters or whether a portion originates from the Philippines which has Few data exist on both the extent of coral banned exports, in order to avoid customs' collection and mining as well as on problems in the USA. damage due to these activities in Indonesia. Here, data will be presented on In the Maldives, coral rock is now the main lime production only. Coral mining construction material, with mining taking estimates for other purposes (e.g. coral place at a rate of 20,000 In3 per year (Brown rock for construction) will not be presented & Dunne, 1988). In Indonesia, mining of due to lack of available data2. The coral rock for construction is taking place estimates for lime manufacturing are in Kalimantan and to some degree in Java, partly based on data gathered from a Sulawesi and Maluku", though the extent village in West Lombok, as well as on is unknown. Coral mining is relatively less other accounts in the literature. In the important in Eastern Indonesia where economic analysis, the costs and benefits fewer houses are built of stone. Coral will be calculated for one km2 of reef, in mining for lime production for the the absence of any other threats. Note that construction of houses is widespread in in the village used in the example, this was Lombok, where some 500-1000 families probably not exactly the case. Here - and used to be involved in the business, but throughout the paper - we assume recently that number has come down. In however a hypothetical example of sites South Sulawesi, coral rocks are used to line subject to an individual threat. shrimp ponds, and coral lime is used as a pH-regulator. Collection, mining and dredging of corals impact heavily on the reef ecosystem. For 52 Threats to Coral Reefs Lime Production" Rp.40,000), but no forest would be irreversibly destroyed. Hence: In West Lombok, 60 families have mined over the last 10 years a stretch of 2 km * Each family uses 20 m3 offfuel wood per along the shore. The reef flat is 0.5 km year, harvested from 0.2 ha; wide. The coral is collected, burnt and sold * The financial costs of the fuel wood per as lime. The lime is of poor quality and family per year is Rp.400,000 (US$ 182), sells for one third of the price of cement: whereas the economic costs are assumed to lime is Rp.80-120/kg and cement is around be double that amount (Rp.800,000)87. Rp.250-400kg. It is sold to the private sector and to the local government, mainly Side-payments for house construction and plaster for schools and other government buildings. The other main cost is a payment for The lime is of poor quality, however, and protection -mining is illegal- of around is mixed with cement and sand before use 240,000 Rp. per year per family. However, for construction. For plaster, it can be used this is only a transfer of resources, and this on its own. Each year, a family produces political rent-seeking is assumed not to and sells around 600 bags of lime (25 kg) have efficiency implications. Therefore, for Rp.3,000 per bag". This gives the this cost will not be included in the following estimates for further analysis8: economic analysis, though it is part of the financial analysis. In other areas, instead of * Each family mines on average about 1660 protection-payments, there may be similar m2 per year, or one ha. every six years. This transfers for renting the land. Thus, we corresponds to 3.3 meters of coastline per assume here as a first approximation that: family per year. * A family produces 15 mt of lime per year e The annual cost of side-payments per sold at a total price of Rp.1.8 mil.(US$ family is Rp.240,000 or US$ 109. This is a 818). financial but not an economic cost. Fuel Wood86 Labors A crucial input for the mining process, The lime production process is a family besides coral, is locally harvested wood. business where the father and some of the Each group of 3 families uses one truck sons are involved in mining, and the whole load (5 in3; 100,000 Rp.) per month. Not family - particularly women - is involved much is known about this fuel wood, but, in the breaking of coral, burning and given the price, it is assumed that it is sieving process. In the financial analysis, secondary forest exploited in a non- cost of labor input to the family is sustainable manner. Secondary forest therefore zero. In the economic analysis, would give 100m3 of fuel wood per ha. however, opportunity costs of rural labor This means that one ha. of this forest is will be taken into account. For Lombok, destroyed every 5 years for lime these costs are taken to be Rp.2,000 per production of one family. If the fuel wood person per day89. However, the labor came from sustainable logging in opportunities are severely constrained. plantation forests, the price in Indonesia Otherwise, they would, according to would be twice as high (1 m3 is around themselves, not have started with the coral mining in the first place. We therefore 53 Economic Analysis of Indonesian Coral Reefs assume conservatively that only one construction, but can be mixed with person in the family could otherwise have cement (J. de Schutter, personal been employed productively elsewhere in communication). the local rural economy for Rp.2,000 per day. Assuming a six day work week and A third alternative is to build without 50 weeks per year, we get: using lime or cement, e.g. by using wood only. However, houses of stone are often a * The labor costs in financial terms are zero; status symbol. Besides, wood also has its * The opportunity cost of labor is taken to be problems (non-sustainable logging). Rp.600,000 (US$ 273) per person per year; Basically, the only reason why lime is so in the absence of mining, only one person cheap is that the corals are unpriced and per family is assumed to find work. the wood is underpriced. Therefore, we will assume for the remainder of the Alternatives For Lime9o analysis that there are no economic costs involved in substitution to cement and There are several alternatives for lime. other alternatives in case of an effective First, lime can be produced differently, enforcement of the ban on coral mining. using hard coral rock found inland. Thus: However, this is not economical, as one needs 5 to 10 times as much wood for Substitution to alternatives in case of burning inland limestone, making the effective enforcement of the ban on coral price of this similar to that of normal mining is assumed to have no economic cement9l, unless other types of energy are cost to society. used92. Secondly, lime can be substituted for an alternative product, such as pure Costs to Society cement. This is not produced in Lombok and is imported from elsewhere in * Extraction of corals for lime production Indonesia. The price difference is around a affects the reef functions of fisheries, factor of 3 (see above), but cement is of coastal protection, tourism, much higher quality (see above). Typically, biodiversity, etc. The costs of some of hotels and other big constructions use these have been discussed in Chapter 2. cement, whereas, lime is used for housing Coastal protection and tourism have for the relatively poor on the island. Note different values depending on the however, that pure lime is too weak for location of the threat (the LOW and Summary of Assumptions of Lime Production: (See also calculations in Appendix) * Each family sells 600 bags (15 ton) of hme per year at Rp.3,000, earnng gross annual income of Rp.1.8 milion (US$ 818). Each family spends 400,000 Rp. (US$ 182) on fuel wood and Rp.320,000 (USS 145) on side-payments as well as Rp.80,000 (US$ 36) on other cost items. So net annual famly income is 1 million Rp (US$ 455). * In the absence of mining, families would earn a net income of Rp.600,000 (US$ 273). * Every six years, a family harvests the corals of one ha. of reef and the fuel wood of 1.2 ha of secondary forest, thereby producing 90 tons of hme, one ha. of reef gives a total gross revenue of Rp.10.8 nullion (US$ 4,909). 54 Threats to Coral Reefs Figure 3.4.1: Destruction of Coral Reefs and of its Functions due to Coral Mining 0.8 S0.6- 8 0.4 0.2 0.0670 175.5, -902.5 Sedunenr -IogginP 98.0 81 0 - 192.0 n a n a. n.a 273.0 Sedument -urban ? ? Cherrislung 38.5 1089 - n a n a. n.a n.a 108.9 of the last chapter can give guidance as to mining is a very marginal activity for the where the key impacts might be and what families involved. Note that side- the loss is in money terms to some of the payments, such as political rents, are not impacted functions. negligible in the case of mining, but are nowhere dose to the magnitude of these This can be confronted with the net payments involved in poison fishing. benefits associated with the threat to see how the losses and benefits relate to each With respect to the table above, some other. This is shown in Table 4.1, where the caveats apply. The stakes per person are net benefits to individuals of a threat are calculated on the basis of man-years. For compared with the net losses to society per mining, where families are involved nearly km of reef. Note that in all cases, the net full-time with this activity, this approach losses to society are much higher than the represents the real stakes per person gains to the individuals responsible for the probably rather well. But in case of blast threat1. Also, note that the net benefits to fishing in part-time subsistence fishery, the individuals seem to be highest for coral actual stakes involved per person are mining and for logging-induced much lower than the stakes given above sedimentation. which are computed on a man-year basis. In the case of poison fishing, the stakes per Knowing the net benefits to the stake- diver are high: US$ 23,400. This is based holders, however important they are, on the assumption that the divers will might not give a clear understanding of the carry out this activity full time over several magnitude of the incentives. For that, we years. Often, however, divers are recruited have to know what are the stakes per for short periods of time only. This again threat per person. Table 4.2 uses the data probably overestimates the real stakes per presented in Table 4.1 above but adds in person significantly. At the same time, the parentheses the net benefits per overall picture that incentives differ person/family/boat/company. dramatically per threat remains valid and Interestingly, poison fishing and logging- that types of management interventions induced sedimentation have by far the differ accordingly. In the case of urban highest private incentives, ranging from sedimentation, especially when some large US$ 1.9 million the case of logging" to industries are involved, the stakes are US$ 317,000 - US$ 1,585,000 in the case of probably high, though we have not been poison fishing.o' At the other extreme, 67 Coral Reef Management: An Economic Perspective Table 4.2: Net Benefits to Individuals: Amount-pr km2 and per Stakeholder (latter in pa entheses; present value; 10% discount rate; 25 y. time-span; in 1000 US$; per kn2) dividuals Threat Fishermen Miners, Loggers Others (payments) 29.3 4.0 (468.6 per boat) (317-1585 per person) Poison Fishing (23.4 per diver) 14-6 - ? Blast Fishing (7.3 per fisherman) 67 54.0 Mining (1.4 per mining family) (18.0 - 54.0 per person) 98.0 98.0 Sedimentation- (1990 per logging family) logging Sediment.-urban ? ? ? 38.5 38.5 Overfishing (0.2 per fisher) able to estimate specific stakes per person problems respectively are often for this situation. responsible for this situation. Urban sedimentation stems often from the coastal Another interesting difference between the towns, but can also come from upland stakeholders for the different threats is areas. Mining and blast fishing are whether they live in the area where the typically activities carried out by the local threat is posed (insiders) or not (outsiders). population, though large scale explosives For instance, in the case of large scale fishery operations do exist (Erdmann, poison fishing operations, the captain and 1995). The insider vs. outsider issues and his crew are outsiders, as if often the case the size of the stakes per person are with logging-induced sedimentation. combined in a two-by-two matrix present Overfishing can both come from local in Table 4.3. These are general tendencies, fishermen as well as from outsiders. and there will inevitably be site-specific Population pressure and open-access Table 4.3: Size of Economic Stake and Location of Stakeholder Size of Economic Stakes small big coral mining, insider blasting, sediment. vertishing integrated Coastal Zone Management a - cyanide, ( outsider overfishing logging Local Threat National Threat Based Approach Based Approach 68 Economic Analysis of Indonesian Coral Reefs circumstances that form exceptions to this management. In cases like coral mining, framework. ad hoc solutions might be appropriate. An example is one village in Bali, that has The matrix elements each require a stopped coral mining completely after a different management approach. In hotel offered employment as gardeners to general, zone management is more all the mining families. appropriate if the stakeholders are insiders. If, however, one deals with large National Threat Based Approach (NTBA) fishing operations in Eastern Indonesia that get licenses from Jakarta, local In situations where the categorization stakeholder consultations are not very 'Big-Outsider" applies for the main useful. If the stakes are small and there is threat(s) in a specific location, action at one dominant threat, such as coral mining the national level is required. The clearest in some locations on West Lombok, example is large scale poison fishing integrated coastal zone management operations, that often take place in remote seems an overkill and a very direct and unpopulated areas. Strong initiatives approach might be the easiest way to at the highest national levels, involving resolve the threat. Based on these features, the Navy and the Policy are the only way the following three types of management to arrest this threat, as local and approaches are defined: provincial officials are powerless in the face of these operations. Likewise, Local Threat Based Approach (LTBA) sedimentation from large scale logging and mining operations can only be dealt If the dominant threat(s) in a specific site with nationally, as it is at that level that fall under the categories 'Small-Insider' the concessions are negotiated. and/or 'Small-Outsider,' a local threat based approach is probably appropriate. Integrated Coastal Zone Management This takes typically the form of (ICZM) community-based management. Examples are villages with a combination When sites cope primarily with'Big- of overfishing and some blasting fishing. Insider' type situations, or if the site is Alternative income generation, confronted with an array of different enforcement of anti-explosives regulation, threats that cannot be dealt with establishment of cooperatives or other separately, ICZM seems appropriate. This types of fishermen groups, etc. could be is for instance the case in Manado, with a appropriate options in such a situation. large thriving diving tourism industry, Re-introduction of traditional common that is more and more threatened by a property resource management (e.g. variety of threats, from sewage to poison 'Sasi'-system in Maluku) is another fishing. Other examples might include possibility. In some situations provincial Jakarta Bay and Ambon Bay, also with a regulation need to be adjusted to allow variety of threats, related to urbanization for common property resource and population pressure. 69 Endnotes 1 The coral area of Indonesia is commonly estimated at 50-100,000 km2. 2 Some claim that a lower discount rate than the opportunity cost of capital is called for given the intergenerational character of the problem: however, this would not qualitatively change the results. Note that a 10% discount rate does not imply that all stakeholders will have this rate of time preference: the discount rate is only used for the welfare economic analysis. The issue of rates of time preference for stakeholders will be discussed in the main text. 3 In the text, both the point estimate (75,000 km2) and the range (50,000 - 100,000 km2) will be used. The estimates will be justified below. 4 The primary goal of the proposed COREMAP project is to improve the management of coral reef ecosystems and rehabilitate degraded coral reefs, for the protection of biodiversity and the sustainable use of marine resources. The preliminary project components have been identified as follows: (i) Locally-based Management of Priority Coral Reef Sites: this component would, through a process of intersectoral and participatory planning with relevant Government agencies, NGOs, private sector representatives and local communities, identify viable solutions for improving coral reef management which address the socio-economic needs of coastal communities; (ii) Establishment of a Coral Reef Information Network: this component would develop and/or strengthen the management information network and manpower capabilities in a number of regional Coral Reef Centers (COREMACs); (iii) Strengthening the Human Resources Capacity, Planning, and Policies affecting coral reef ecosystems: this component would provide support to on-site management by improving relevant policies, regulations, and legislation influencing coral reef ecosystems; devise cost-effective enforcement mechanisms; and improve human resources capacity of project stakeholders through the provision of strategic education and training programs, and on-the-job skill development; (iv) Public Awareness and Participation: this component would aim to generate public support for conserving Indonesia's marine biodiversity by directing communication and education efforts at strategic audiences and decision makers. COREMAP is expected to become a national program involving multiple donors and multiple projects. The project, which is expected to be financed by the World Bank and by the Global Environmental Facility, would be carried out an area encompassing five provinces in Eastern Indonesia of high biodiversity importance. The provinces have been tentatively identified as Maluku, Irian Jaya, South Sulawesi, East and West Nusa Tenggara. The project implementation will involve multiple agencies. It is expected that a steering committee will be created at the national level, coordinated by Bappenas, and that implementation will be carried out through local governments (for on-site activities), and through the Oceanology Centre of the Indonesian Institute of Science (LIPI-P30) for monitoring and research activities. 5 See Brown et al. (1993) for an literature review of valuation studies on, among others, coral reefs. Hoagland et al. (1995) give an overview of net benefit evaluations for marine reserves (especially USA). 70 Economic Analysis of Indonesian Coral Reefs 6 This is the net present value at a 10% discount rate. See McManus et al. (1992) for a very extensive site-survey of catch of various types of fishery in Bolinao (Philippines). 7 See McManus et al. (1992) for a very extensive site-survey of catch of various types of fishery in Bolinao (Philippines). 8 These techniques will be explained in Chapter 3. 9 Munro & Williams (1985) give a yield effort curve with fishing intensity expressed in persons in local population per hectare of reef. The maximum sustainable yield is around 11-12 kg per person per year. This either means that most people have other income generation most of the time or that hectares and km2 are mixed up in the paper. 10 McManus et al. (1992) also quotes a study of coral reef fish catch vs. fishing intensity for 11 American Samoa villages. The derived yield-curve shows a maximum sustainable yield (MSY) of around 30 mt/km2/year and a yield of around 15 mt/km2/year when fishing intensity is increased two to threefold. 11 See Hanig et al. (1988) gives costs of various types of capital. 12 See economic survey of subsistence farming in NTT (Indonesia), World Bank (1995). 13 Riopelle (1992) assumes that 10% of hotel revenues are from directly reef-related tourism. This gives a net present value of total rent of US$ 17.8 million from 19 thousand divers and some 50 thousand snorkelers. Net present value of rental of diving and snorkeling equipment (with profit margin of 20% respecially 80%) is US$ 5.7, so that NPV of total reef-related rent is US$ 23.5 million. 14 The mid-point between US$ 1,000,000 (major tourism) and US$ 6,000 (some tourism) is US$ 503,000. 15 Data on agriculture are from Hendrik van Voorthuizen, EA3AG, World Bank (personal communication). 16 The discount rate is 10%, the opportunity cost of capital for Indonesia (in World Bank projects). 17 Data on roads are from Joris van der Ven, EA3IN (World Bank) and data on houses are from Heinz Unger, ASTEN (World Bank), private communication. 18 Anonymous manager of resort-chain; personal communication. 19 In Lombok, average annual costs are US$ 125,000. Taking a discount rate of 10% and a time-frame of 25 years, this means total costs of US$ 1.25 million (if costs are made at the beginning of each year). The hotel has a stretch of beach of 250 meter, so that the total costs are US$ 5.0 million per km. For the hotel in Bali, costs are US$1 million for an area of 500 meter, or US$ 2.0 million per km of coastline. 20 The objectives of the proposed 'Urgent Bali Beach Conservation Project' are (i) to prevent beach erosion; (ii) to protect coastal tourism resorts; (iii) to protect coastal places of worship. Source: Bappenas Bluebook 1995/96. 21 For fishery, only one scenario is taken. The net benefits are, as discussed above, US$12,000 per km2. This means that the present value at 10% discount rate is US$ 108,000 per km2. 22 The stone often pounds on the corals, thereby destroying them (Gomez et al; 1988). 71 Endnotes 2 Cyanide is bought in the form of sodium cyanide (NaCN) or potassium cyanide (KCN). This is dissolved into water to obtain hydrocyanic acid (HCN) (cf. Rubec, 1988). 24 Anonymous, personal communication (1995). 2 Dr. Johannes, personal communication (1996). 26 Johannes & Riepen (1995) give 50-70 tablets per kg and 2-6 tablets per one-liter squirt bottle; another account gives 50 tablets per kg and 1-2 tablets per bottle (personal communication Dr. V.R. Pratt). 27 Johannes & Riepen (1995). 2 Data on kg/week are from Dr. V.R. Pratt (personal communication). Dr. R.E. Johannes suggested that daily catch per fisherman are around 9-10 live fish per day. This is in line with an account stating that a boat with a crew of 20 catches 3 tonnes per month (av. weight 1kg) (anonymous, personal communication). Assuming they fish 5-6 days a week, this gives 16-22 gr. of cyanide per live-fish provided they use one kg per week. 29 For the Philippines, it is estimated that 150,000kg of cyanide is used per year (McAllister, 1988), though Dr. V. Pratt estimated the total cyanide itse there to be 150-400 tons (Johannes & Riepen, 1995). 3 McAllister (1988) also reports accounts of the use of 5 kg of cyanide per fisherman per week. 31 Personal communication from Dr. R.E. Johannes and anonymous expert. 32 Johannes & Riepen (1995) and personal communication from anonymous expert. 3 McAllister (1988) reports US$ 6/kg; 1995 figures are the same (personal communication Dr. V.R. Pratt). 3 Accounts for the Philippines state that in remote areas, retail prices might be as high as US$ 12.2 (in the villages of Jolo and Tawi-Tawi; Alvarez, 1995), whereas one account states that in a large drug store in Manila, cyanide is available for a mere US$ 3.5/kg. 3 Pratt (personal communication 1995). 3 Anonymous source in Indonesian fishery industry (personal communication 1995). 3 Wild-caught live food-fish is rubricated as 'ikan liannya' (other fish) in the category 'ikan hidup' (live fish), which further contains various fresh water fishes. The number 1,522 mt is the total number for 'other fish'. Probably, wild-caught live food-fish is the bulk of this category. 3 This is the largest species (max. size is over 2 m!) of the fam Labridae. The Napoleon wrasse is also referred to as Humphead wrasse, Maori wrasse and giant labrid. 3 Personal communication, Dr. R.E. Johannes. Napoleon wrasse form only a small portion of total sustainable catch and will be taken together with groupers in this analysis for the sake of simplicity. 40 Total maximum sustainable yield (MSY) of finfish is taken to be 10 mt/km2/yr for moderately fished reefs and 20 mt/km2/yr for pristine reefs (like reserves) (see Chapter 2 for assumptions). 41 This is a very rough estimate. Johannes & Riepen (1995) report that growth rates in aquaculture ponds in Taiwan for Malabar groupers (Epinephelus malabaricus) are as follows: fertilised eggs to 8 cm fingerlings (about three months); fingerlings to 600-800 gr. groupers (about 1 year); fingerlings to 2.0 72 Economic Analysis of Indonesian Coral Reefs kilograms (about 1.8-2 year).Sexual maturity is reached after the first year, though sex conversion makes generalisations difficult. Besides, aquaculture data are often significantly different from reef-data. The data together give a general indication that the ratio biomass/catchable yield is somewhere between 1 and 3. 42 Indonesia is assumed to have a reef area of 75,000 km2 (see Chapter 1). Most of cyanide fishing is going on in Sulawesi, NIT,NTB, Maluku, Irian Jaya, with around 70% or total reefs. In these areas, 40% of coral cover was up to recently in good or excellent condition (Wilkinson et al., 1993). This gives an area of 21,000 km2 of relatively pristine reefs. 4 With an annual export of 15,000 mt, and a mortality rate during collection and transport of some 50% (ADB, 1992; Johannes & Riepen, 1995) as well as a total catch of 10 mt/km2, this would mean that grouper populations are wiped out in some 3,000 km2 per year. If the catch takes place primarily in good and excellent reefs (total area is 21,000 km2), and is destroyed by cyanide, this catch can last for some 7 years. Given its recent start, some 3 years ago, there are 4 more years to go. 44 This is a conservative guestinate. One anonymous record mentioned that these payments are a lot and that they for a huge income to the Navy and the police. 45 Allegedly, one large scale operator was seized by locals in the Marine National Park of Cenderawasih (Irian Jaya), but freed by the authorities after a ransom had been paid (anonymous, pers.comm, 1995). 46 The particular examples were for teripang and lobster fishing. However, for groupers, it seems that similar situation occur. 47 Estimates of Mark Erdmann are that there are fewer boats, but more trips. The overall number of boat trips, might be similar. 4 Actually, assuming that the effort will continue at a level of 10 menyears, the sustainable level of yield at that level of effort is 6 mt/km2/yr (See Appendix 2 for detailed calculation). 49 Personal communication, anonymous expert. * Johannes & Riepen (1995) state that with middlemen, village fishermen receive "approximately one- third of the price live fish agents pay to those who contract the fishermen. The standard markup between the fishermen contractor and the export agent was around 100%. Combining this information with the mark-ups, this means in the case of coral trout that the middleman gets around US$ 8-10 and the fisherman gets about US$ 2.5-3 (for highfin grouper and Napoleon wrasse, the amounts are more than twice as high). 51 In the Philippines, distance-wise twice as dose to the Hong Kong market as Indonesia, the fishermen get a higher share, as can be expected. Air-freight transport is extensively used, where the exporter gets the fish directly from the middlemen. The latter flies the live-fish from the provinces to Manila. In this case, Alvarez (1995) reports that fishermen are paid P 350/kg of grouper (US$ 14/kg) and twice as much for Napoleon wrasse (i.e. US$ 28/kg). Their middlemen sell the fish to Manila-based exporters for an average of P 900/kg (US$ 36/kg). The middleman delivers it transport-ready in special air-freight packages. The middlemen (alias export agent) make a net profit of US$ 8/kg. Alvarez (1995) states that "after deducting the cost of air freight, packing and other handling expenses, the middlemen make a per kilo net profit of P 200" (i.e. US$ 8). In the Philippines, live fish are in this case transported by air from the regions to Manila by plane and then from Manila to Hong Kong and other places. In other countries, the prices may also be different. For instance, Australia with a small but capital intensive live-fish trade (no cyanide) to the Asian market, gross return to the fishermen is around US$18 (see Johannes & Riepen, 1995). The other extreme is Papua New Guinea: fishermen get no more than US$1 per kg. 73 Endnotes 52 Hannig et al. (1988) give precise values for out-rigger boats and outboard motors: maximum prices for boats are Rp. 650,000 (average depreciation: 11 years); for out-board motors are Rp. 1 million (average depreciation: 6-7 years). This would give total average annual costs of around Rp. 400,000. Daily fuel costs are Rp. 4,000. If it takes them about a two month to catch all the groupers (i.e. they catch 8 groupers a day), then total fuel costs are around Rp. 200,000. Hence, total costs are around Rp. 600,000 (US$ 272) per year. With inflation over the years, we assume that currently, the costs will be US$300. 53 According to Dr. R.E. Johannes (personal communication), in one specific instance, fishermen using cyanide catch around 8-9 groupers a day and those using hook-and-line catch 4-5 a day. In more depleted reefs, the difference is probably larger in percentage terms. 5 It is assumed that the remaining catch can be harvested within the available time frame for two reasons: first, around the maximum sustainable yield, a marginal decrease in effort does not significantly decrease the yield (assuming that the yield-effort curve is parabola-shaped); second, with 25 full time fishermen, catching 15 mt/km2/yr, 500 days for lint of groupers is dose to the average catch per effort. 55 All of the data are explained above and presented in Appendix 4 or can be inferred from the discussion above; other costs and opportunity costs for group B and C is split up between items I and II for convenience in a proportion of 1:15. Other costs of live fish grouper catch totals 7.4, of which 2.3 comes from other fishery (as in B-II). Hence, the rest (5.2) are a cost item for C-I. s6 Thus it is assumed that the area has a 5% chance of having high tourist potential, a 15% change of have some recreational possibilities and a 80% chance of having no tourist potential at all. (cf. large scale operations). 57 See above: 5% high tourism potential, 15% some possibilities and 80% no tourism potential. 5 A.A. Alvarez (1995) presents estimates of 4,000 cyanide-using aquarium fish gatherers and 2,000 people involved in live food fish. McAllister (1988) reports 1,000 full time aquarium fish collectors. Rubec (1988) reports a lower number: 1500 aquarium fishers and 1500 live food fishers. 59 It is not easy to confirm this on the basis of the Indonesian annual fisheries statistics. Uncertainty exists about whether the fish are counted per piece or per kg, and if the volume is taken, it is not dear whether these are gross figures (including the water), or net weights. Value figures for 1993 in these statistics are US$ 2.84 million (category: 'ikan hias' or aquarium fish), less than 10% of our estimate. 6o Prices in Ambon (Maluku) range from Rp. 400 to 10,000 (US$ 0.18-4.5). The highest priced species are the Majestic angelfish (Pomacanthus xanthometapon) and the Striped triggerfish (Balistapus undulatus). Most of the catch, though, are damsels and other pomacentrids at the bottom of the price range. 61 Galvez et al. (1989) state that in San Roque (Philippines), blast fishing was already introduced after WW-I. FAO (1979) gives a short history of dynamiting in Ambon (Maluku, Indonesia). The idea that blast fishermen want to "earn money the easy way" is often heard (see Galvez et al, op. cit.). 62 See Rubec (1988), Alcala & Gomez (1987) and Galvez et al. (1989) for accounts on the Philippines. 63 McManus et al. (1992) reports that within a listening radius of 2-3 km, some 10 explosions per hour could be heard in Bolinao Bay (Philippines). 6 Alcala & Gomez (1987) report this diameter figure for gallon sized bombs, but take 3 m for beer bottle bombs. McManus et al. (1992) quotes a range of 2-3 m. Therefore, we have taken 2.5 m as mid-point estimate. 74 Economic Analysis of Indonesian Coral Reefs 65. Blast overpressure doubles with an eight fold (23) increase of explosive charge in open water. Shock waves are reflected by the bottom depending on the type of substratum (Alcala & Gomez, 1987). A 4 kg charge corresponds to some two gallon seized bombs (assuming that ca. 50% is sand). As stated above, a gallon-sized bomb shatters an area of 10 m diameter to pieces, so two such bombs would destroy an area of around 12.5-14 meter, depending on the substratum. If this kills 4 of 5 genera of fish with air- bladders ca. 16 meters away, this means that most such fish are killed in a area with a diameter of 32 meters. Therefore, a gallon sized bomb destroys fish in a diameter-range more than twice as large as the range of shattered corals. Generalising this, we get the result in the text. 6 Rubec (1988) quotes two intact reefs with yields of 31.8-36.9 mt/km2/yr and destroyed reefs (blasting, muro-ami) with yields of 5-5.9 mt/km2/yr. Note that both figures should be taken with some caution as it is not dear whether the levels of effort differ. 67 Note that in the case of coral mining, we assumed that coastal erosion starts at 50% coral destruction. The reason for this difference is that in coral mining, the activities start on the reef flat, and gradually move out towards the crest. Therefore, the coastal protection function will be maintained longer. Needless to say, both are very rough generalisations, and site-specific conditions might be vastly different. 68 See Christie et al. (1994) for accounts on blasted areas on San Salvador's reef, compared to Apo Island, both in the Philippines. 69 Alcala & Gomez (1987). 70 Total live coral cover and mortality index for Apo are calculated using data in Savina & White (1986). 71 We assume a price some US$ 0.5-0.6/kg and a high profit margin (large rents); Erdmann (personal communication states that the range is probably between 3-8 tons, dose to our outcomes. 72 Galvez et al. (1994) that blast fishers spend at most eight hours at sea. McManus (personal communication) states that the blast fishermen often spend only two hours at sea. Here we have taken a rough figure in between. 73 Pauly et al. (1989) gives number of blasts per 10-16 hp. boat involved in dynamite fishing. Some 56% of boats have one blast per day; around 29% have two blasts and only 15% use three or more bombs. Own observations and interviews in Indonesia confirmed that most blast fishermen use one bomb per day. 74 Dr. J.W. McManus, and Dr. V. Pratt, personal communication. 75 Galvez et al. (1989) state that gunpowder costs around P150 (US$ 7.15 in 1988 prices) per kg. Sand and explosives charge are mixed half-half, so around 0.10 kg of gunpowder is used for a beer bottle. A blasting cap costs P1O (US$ 0.48). So, this means that the bomb costs around US$ 1.2. In Indonesia, we heard one account of 200 bottle bombs, made from a large WWII bomb, which was traded for Rp. 150,000-250,000 (US$ 68-114). This would mean that the explosives charge per bottle would only cost around US$ 0.34-0.57. Pratt (personal communication) conveyed that a softdrink bottle costs around US$ 0.5-1. From this combined information, we take as a rough point-estimate a price of a beer-bottle bomb to be US$1. 76 Data LIPI (Jakarta), 1995. 77 For the crew of two, the costs are US$1 for the bomb and Rp. 4,800 for the 'other' costs. This gives the profits mentioned in the text with a price of fish of US$ 0.67 per kilo. 75 Endnotes 78 The official Indonesian fisheries export statistics lump corals and shells together and gives kg and US$, but it is very difficult to relate these back to pieces. 79 Information from Dr. Soeharsono, LIPI, Jakarta (personal communication). 8 Data are for the Maldives quoted from Brown & Dunne (1988), p. 162. 81 For an overview of impacts of dredging on coral reefs and off-site, see Salvat (1987). For an interesting account of coral rock mining in the Maldives, see Brown & Dunne (1988). Rubec (1988) gives an account of the extent of coral rock mining for construction and ornamental coral trade in the Philippines. 82 It is known that coral rocks for construction are typically gathered by families building their own house. The alternative - bricks - cost around Rp.20-35 per bricks. For a simple house, around 5,000- 10,000 bricks might be used (data: Heinz Unger (ASTEN, World Bank) and the World Bank COREMAP team (personal communication);. It is not clear, though, how much reef is mined for the construction of one house. 8 Data on mining in Lombok are from Dr. Soeharsono, LIPI, as well as from field observations of members of the World Bank COREMAP-team (personal communication). 8 The Rupiah-dollar exchange rate is taken to be 2,200 Rp. for 1 dollar. 85 Another village in North West Lombok has 120-150 families in an area of 15 km of shoreline. These people have mined since 1935 approximately in that area. (Joop de Schutter, personal communication). These data are in line with the data used here. 8 Data are from Dr. Soeharsono, LIPI, and from Jim Douglas, EA3AG, World Bank (personal communication). 87 If logging concessions are going on in the neighbourhood of a coral mining area, fire wood (left-overs of the logging) could be obtained without additional forest destruction. 8 Data are from Dr. Soeharsono, LIPI, and from Hendrik v.Voorthuizen, EA3AG, World Bank (personal communication). 89 See World Bank Nusu Tenggara Agricultural Area Development Project, Report. 15043, 1995. 9 Note that we focus on alternatives for lime and not on coral rocks also used for houses that could be substituted for bricks or, sometimes, wood (see footnote above); Data are from Pak Soeharsono, LIPI (personal communication). 91 A five to ten fold increase in wood input would, ceteris paribus, increase the price 2-3 fold. Other costs (mining costs) are probably higher as well. Therefore, inland hard coral rock is not a viable alternative. 92 An economic analysis has been carried out in the 1980s in Lombok of the use of oil burners, which appear to be economical (J. de Schutter, personal communication). 9 Dr. Johannes, personal communication. 94 The difference between the benefits to the miners and the costs to the functions and the additional costs of wood is the present value of side-payments, which form a cost for the miners but not to society, as discussed above. Note also that the value for coastal protection is different from the present values 76 Economic Analysis of Indonesian Coral Reefs discussed above (US$820, because the damage - especially to coastal protection - will only occur gradually. 95 Note that these values are different from the present values discussed above (US$50,000 for sand erosion and US$ 3,000 for tourism), because the damage - especially to coastal protection - will ol In the text, both the point estimate (75,000 km2) and the range (50,000 - 100,000 km2) will be used. The estimates will be justified below. 96 The annual earnings of the miners is 1,260,000 Rp., because monthly sales of lime are: 200,000 Rp., costs of fuel wood costs: 33,000; costs of protection: 27,000 Rp. Mining takes place for 9 months a year. This means that on an average monthly basis per year, income is 105,000 Rp. 97 Tomascik et al. (1993) also give the relationship between the extinction coefficient (k) and distance of various islands from mainland Java (x): k = 0.86 x-0-5. The extinction coefficient, k, is related to the secchi disk depth (D) in the following way: k = 1. 7/D. 98 The linear relationship between distance from mainland Java (D) and percentage of live coral cover (C) is: C= 6.7290 + 0.4565*D. The correlation coefficient is r=0.6549 (Hutomo, 1987). 9 Dr. G. Hodgson (personal communication). 100 Likewise, Ruiterbeek (1992) has carried out an economic evaluation of mangrove logging and corresponding losses to society (fishing, etc.) for Bintuni Bay, Irian Jaya (Indonesia). However, in that area, there are no coral reefs. 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"An Economic Analysis of Coral Reef Protection in Negril, Jamaica," Thesis, Williams College, Williamstown, Massachusetts. 85 Appendices 86 Economic Analysis of Indonesian Coral Reefs Appendix 1: Bibliographv of Man-Made Coral Reef Destruction Authors Title Description Threats A.C. Alcala Effects of Marine Reserves on description of 3 islands in Ph. with data of overfishing (1988) coral Reef Abundances and reserve and non-reserve period; Yields of Ph. Coral Reefs )ield/effort data are striking J. Alder et al. A Comparison of Management comparison of P. Seribu, TBR + Bunaken in overfishing blasting (1994-b) Planning and Implementation in mngt., issues and implementation; urbanization 3 Indonesian MPAs commercial & subsistence exploitation, urban areas, econ. development A.A. Alvarez Dead Corals in Exchange for short description of live fish trade in poison (1995) Live Fish Exports Phil. and effects on corals J. Andersson Marine resource Use in the valuation of benefits of Mafia park, looking blasting overfishing (1995) Proposed Mafia Island Marine at TEV coral mining Park J.D. Bell & R. Influence of live coral cover on empirical study in French Polynesia on general Galzin coral reef fish communities effect of differences in % live cover on (1984) number of fish species and individuals B.E. Brown & R.P. The Environmental Impact of description of current coral mining in coral mining Dunne Coral Mining on Coral Reefs in Maldives and resulting environmental (1988) the Maldives damage; projected extraction of coral and discussion of alternatives J.N. Butler et al. The Bermuda Fisheries: A description of decline in fish stock and overfishing pollution (1993) Tragedy of the Commons changing mix of fish in Bermuda islands Averted? and measures taken J. Caldecott Dead in the Water: Threats to story of massive upsurge of destructive poison blasting (1994) Indonesia's Dive-Tourism fishing practices in Indonesia in 1994. Industry G. Cambers Coastal Zone Management: discussion of coastal zone management pollution construction (1992) Case Studies from the Caribbean and illustration of case studies (sewage pollution; beach erosion, etc.) W.L. Campos et al. Yield Estimates, catch, effort description of catch, fishing effort and overfishing (1994) and fishery potential of the reef yield estimates specified by types of gear flat in Cape Bolinao, Philippines (spear, traps, corrals, grill nets) P. Christie et al. Community-Based Coral Reef description of Marine Conserv. Project blasting poison (1994) Management on San Salvador showing that comm. based mngt. can stop finemesh Island, the Philippines coral threats D. Davis et al. Conflicts in a marine protected general information on economic/envir. tourism (1995) area: Scuba Divers, Economics, issues in the Julian Rocks Aquatic Reserve Ecology and Management in (Australia) Julian Rock Aquatic Reserve D. Davis & C. Recreational SCUBA Diving and analysis of conflicts between recreation and tourism Tisdell Carrying Capacity in Marine conservation (1995) Protected Areas G.D. Dennis & T.J. The Impact see title: reef fish recolonization (species grounding Bright (1988) of a Ship Grounding on the Reef composition, community structure, Fish Assemblage at Molasses biomass) Reef, Key Largo Nat. Mar. Sanctuary, FA. J.A. Dixon Economic Benefits of Marine description of costs and benefits of MPAs, mooring tourism (1993) Protected Areas with specific reference to Saba, Virgin Islands, Bonaire J.A. Dixon et al. Ecology and Microeconomics as econ. analysis of costs and benefits of tourism (1995) "Joint Products": The Bonaire protection and the physical limits of Marine Park in the Caribbean tourism! M. Erdmann The ABC Guide to Coral Reef short anecdotal directory to the major poison blasting (1995) Fisheries in Southwest Sulawesi, fisheries, techniques and problems in coral collection Indonesia (+letter) Spermonde reef fisheries 87 Appendices Erdmann, M.V. & "How Fresh is Too Fresh: The K. Pet-Soede Live Reef Food Fish Trade in (1996) Eastern Indonesia." FAO Report on a Preliminary Survey description of quick appraisal of two dynamiting (1979) of the P.Pombo and P.Kassa MPAs in Maluku with recommend. on overfishing tourism marine reserves, Maluku. legal status C. Gabrie' et al. Study of the Coral Reefs of quick appraisal of Bora-Bora with overfishing tourism (1994) Bora-Bora for the Development discussion of multiple-use conflicts and urbanization of a Conservation and management solutions Management Plan R. Galvez et al. Sociocultural Dynamics of Blast detailed description of blast and cyanide blasting poison (1989) Fishing and Sodium Cyanide fishing in two villages in the Phil.; focus on Fishing in Two Fishing Villages ethnography; interesting observations on in the Lingayen Gulf Area why?, how? and how much? of activities ED. Gomez & H.T. Coral Reefs in the Pacific - Their description of coral reefs in pacific states overfishing Yap (1985) Potential and their Limitations and man's relation to the coral reefs population ED. Gomez et al. Assessment of Tridacna Crocea in see title (Tridacna Crocea is burrowing overfishing (1994) an Exploited Philippine Reef giant clam) ED. Gomez et al. A Review of the Status of description of status of reefs (coral cover, all (1994) Philippine Reef mortality index) and discussion of the causes of degradation, reef functions, etc. S.R. Gittings et al. The Recovery Process in a effect of ship grounding on coral grounding (1988) Mechanically Damaged Coral recruitment and tissue regeneration Reef Community: Recruitment and Growth J.R.E. Harger Community Displaced. in analysis of coral coverage (live and hard)/ sedimentation (1988) Stressed Coral Reef Systems and and fish species/ etc. in Palau Seribu sewage pollution the Implicatations for a (Indonesia) in relation to the distance to Compreh. Mngt. Strat. for mainland (Jakarta Bay area) Coastal & Offshore Productiv. Enrichment A.L. Hatcher et al. Resolving the conflict between detailed study of 3 little island groups in tourism (1990) conservation values and Australia showing that ecological and extractive use of the Abrolhos fishery values differ per zone so that actual coral reefs area of conflict is limited. J.P. Hawkins & The Growth of Coastal Tourism description of coral reef damage due to tourism econ. C.M. Roberts in the Red Sea: Present and tourists and possibilities for sustainable devel. (1994) Future Effects on Coral Reefs tourism in Red Sea T.G. Hinggo & R. Aquarium Fish Industry in the description of aquarium fish industry in poison Rivera (1991) Philippines: toward Bolinao, the why of cyanide use and Development or Destruction marketing of alternatives G. Hodgson & J.A. Logging Versus Fisheries and see title sedimentation Dixon (1988) Tourism in Palawan: An Environmental and Economic Analysis T.P. Hughes Catastrophies, Phase Shifts, and description of coral reef degradation overfishing (1994) Large-Scale Degradation of a following hurricanes and diseases of algae hurricanes disease Caribbean Coral Reef eating fish M. Hutomo Coral Fish Resources and their see title; relationship between live coral sedimentation, etc. (1987) Relation to Reef Condition: and number of fish species Some Case Studies in Indonesian Waters R.E Johannes & M. Environmental, Economic and see title; excellent description of live food poison Riepen (1995) Social Implications of the Live fish trade for Asian market and their Reef Fish Trade in the Asia and impacts on reefs and humans the Western Pacific A. Lillie & Trade in Ornamental Fish and see title (Indonesia) poison coral Suharsono Coral collection (1995?) 88 Economic Analysis of Indonesian Coral Reefs Marinelife (1995) IMA Promotes Hook-and-Line description of use of hook-and-line for live poison as an Alternative to Cyanide fish catch Fishing D.E. McAllister Environmental, Economic and estimation of costs of coral reef destruction sedimentation poison (1988) Social Costs of Coral Reef (diff. threats) and econ. & social blasting agriculture Destruction in the Ph. consequences (tourism rev., malnutrition) J.W. McManus Managing Seagrass Fisheries in discussion of seagrass fishery and potential blasting (1993) Southeast Asia: An Introductory for community based management in those Overview areas J.W. McManus The Spratly Islands: A Marine threats for Spratly Is1. (military; potential military oil drilling (1994) Park? oil) and possibility for international marine park J.W. McManus Social and Economic Aspects of description of the why and how of the overfishing muro-ami (forthcoming 1996) Reef Fisheries and their 'tragedy of the common reef; description Management of management options and some case histories; J.W. McManus & Coral Communities of Outer see title; also discussion of fishery and of pollution J.J. Wenno Ambon Bay: A General present and potential threats to the corals sedimentation (1988) Assessment Survey J.W. McManus et Resource Ecology of the Bolinao description of results of large research overfishing poison al. (1992) Coral Reef System program on harvest methods and yield in blasting anchoring Phil. location; recommendation to reduce fishing effort with 60% and suggestions for alternative livelihoods M.K. Moosa et al. Coastal Zone Management of papers on coral reefs, seagrass and various (1993) Small Island Ecosystem mangrove II4Coast.Z.Mngt Maluku; (Proceedings) II-7 role/functions cor.reefs; 1-2: Aru Tenggara M.Res. M.C. Ohman, et al. Human Disturbances on Coral study of life coral cover, species richness mining nylon nets (1993) Reefs in Sri Lanka: A Case Study and coral rubble in 3 Sri Lankan sites D. Pauly Fisheri-,s Resources discussion on marine fishery development population (1988) Management in Southeast Asia: over time in ASEAN countries (incl. Why Bother Indon.); discussion on increase of effort (pop. growth; inv. in fleet) and call for lower fleet investments D. Pauly & T-E. The overfishing of marine description of marine fishery development type of gear Chua (1988) resources: socio-economic from 60s to now, stressing fishery techn. population background in southeast Asia change and human population growth as most important factors N.V.C. Polunin & Greater biomass and value of discussion of difference in biomass and overfishing C.M. Roberts target coral reef fishes in two abundance in protected marine areas vs. (1993) small Caribbean marine non-protected areas in two Caribbean coral reserves reefs J. Purwanto The Stress Effect on coral Reef see title; human induced stresses have pollution waste (1986) Econsystems of Pari Island, greater impact than natural stresses overfishing coral I Indonesia mining R. H. Richmond Coral Reefs: Present Problems discussion on natural vs. anthropogenic sedimentation (1993) and Future Concerns Resulting stress (esp. sedimentation, sewage) on reef pollution starfish from Anthropogenic viability Disturbance J.M. Riopelle The Economic Valuation of calculation of Total Economic Value (TEV) various (1995) Coral Reefs: A Case Study of of coral reefs in the Kabupaten of West West Lombok, Indonesia Lombok C.M. Roberts Damage to Coral Reefs in Virgin see title: study on physical damage to reefs tourism (1993) Islands National Park and due to anchors, boat groundings and Biosphere Reserve from careless snorkelers Recreational Activities 89 Appendices C.M. Roberts Rapid Build-up of Fish Biomass see title: study on fish biomass over time in overfishing (1995) in a Caribbean Marine Reserve and around reserves, showing that reserves as well as reduction in fishing pressure increase biomass C.M. Roberts Effects of Fishing on the discussion of effects of overfishing of overfishing (1995) Ecosystem Structure of Coral specific species on ecosystem equilibrium; Reefs overfishing is also shown to interact with other threats C.S. Rogers Responses of coral reefs and reef literature review of effects of sedimentation sedimentation (1990) organisms to sedimentation (dredging, sewage, natural runoff) on coral pollution dredging reefs and associated organisms sewage Pj. Rubec The need for conservation and description of threats to biological diversity muro-ami poison (1988) management of Philippines and productivity of Ph. reefs; conservation blasting overfishing coral reefs methods and village-based management sedimentation coral - collection trawling H.J. Ruitenbeek Mangrove Management.: An ec. analysis (with househ. survey) of diff. sedimentation (1992) Economic Analysis of mangrove policies given shrimp industry Management Options with a under different linkage assumptions focus on Bintuni Bay, IJ. G.H. Russ Distribution and Abundance of see title overfishing (1989) Coral Reef fishes in the Sumilon Isl. Reserve, Centr. Phil., after 9 Yrs. of Protection from Fishing G.H. Russ Coral Reef Fisheries: Effects and literature review of effects of fishing on overfishing (1991) Yields catch and catch per unit of coral reef fisheries G.H. Russ The Use of Refugia for Fishery discussion of advantages and overfishing (1994xx) Resource Management on Coral disadvantages of long term spatial Reefs closures; discussion of larval and adult fluxes of fish KD. Russell The Economics of Coastal Waste analysis of costs and benefits (tourism, sedimentation waste (1992) Management fishery, etc.) of waste management C. Safina Phil. Shark Fisheries in a Global see title; description of shark fin overfishing (1995vv) Contexzt and a overfishing Recommendation to end Fin Exports B. Salvat (Ed.) Human Impacts on coral Reefs: edited volume with contrib. by Salvat, blasting coral (1987) Facts and Recommendations Gomez, Yap, Munro, White et al. on all collection overfishing human impacts on coral reefs!!! poison muro-ami pollution, dredgJmining tourism G.C. Savina & A.T. A Tale of Two Islands: Some comparison of fishery data for two islands overfishing blasting White Lessons for Marine Resource in Philippines with coral reef; discussion (1986) Management marine protected areas D.A. Sawyer TBR: Management Development socio-economic household survey and overfishing (1992) and Resource Valuation of an cost-benefit analysis of MPA, using env. Indonesian Atoll productivity figures R. Soekarno Comparative Studies on the discussion of human impacts on coral reefs sedimentation (1989) Status of Indonesian Coral Reefs over time (coral cover, fishery) pollution R. Soekarno The Effect of Environmental presentation of data on benthic lifeforms sedimentation (1987) Trends and Associated Human (coral cover, abiotic, algae, other fauna) in pollution Damage on coral Reefs in the 4 zones in P. Seribu (depending on distance Seribu Islands, Jakarta to Jakarta) J.P.G. Spurgeon The Economic Valuation of descr. of TEV of coral reefs with direct use mining others (1992) Coral Reefs value (extract.:fishery; non-extract: tourism, etc), indirect use value (coastal erosion), intrinsic value, aggragation and double counting 90 Economic Analysis of Indonesian Coral Reefs L. Sya'rani The Exploration of Giant Clam discussion of consequences of giant clam collection (1987) Fossils on the Fringing Reef gathering on the reefs Areas of Karimun Jawa Islands J. Sybesma Marine Resource Protection discussion of the conflicting goals of nature tourism (1988) versus Marine Tourism in conservation, recreation and exploitation Curacao: a Management _ Problem T. Tomascik Coral Reef Ecosytems: guidelines for ecosystem maintenance/ tourism mining (1993) Environmental Management development activities (e.g. mining) and its sewage industry, etc. Guidelines hazards; + good intro on (types of) coral reefs and measuring its health T. Tomascik et al. Case Histories: A Histor. analysis of historic and current data on sedimentation; (1993) Perspective of the Nat. and anthropogenic eutrophication leading to pollution Anthropogenic Impacts in the major ecosystem shift and animal algal Indon. Archipelago with a relation Focus on the P. Seribu, Java Sea G.F. Usher Coral Reef Invertebrates in detailed description of invertebrates (pearl natural man-induced (WWFIIUNC) Indon.: Their Exploitation and oysters, greensnail, trochus, other shells, (1984) Conservation Needs sea cucumber) in Ind. A.T. White Sumilon Island: Philippine success-story of Sumilon Island where overfishing (1979) Marine Park Pilot Site Enjoys marine park is well enforced Early Success A.T. White Coral Reefs: Valuable Resources Overview article on coral reef ecology, all (1987) of Southeast Asia functions of reefs, its plants and animals, threats and conservation options A.T. White Two Community-based Marine 2 Phil. islands with coral reefs are overfishing (1989) Reserves: Lessons for Coastal compared with emphasis on fish yield Management under different management schemes A.T. White & G.C. Reef Fish Yield and Nonreef detailed analysis of catch on-reef and off- overfishing etc. Savina (1987) Catch of Apo Island, Negros, reef in Apo and discussion of why yield Philippines vary much over different islands C.R.Wilkinson et Status of Coral Reefs in presentation of data on live coral cover in all al. Southeast Asia: Threats and Southeast Asia (1993) Responses C.R.Wilinson & Global Climate Change and Assessment of the potential and expected climate change R.W. Buddemeier Coral Reefs: Implications for effects of global climate change on coral population (1995) People and Reefs reef ecosystems and the peoples P.P. Wong Coastal Tourism in Southeast see title; discussion of physical tourism (1991) Asia environment, beach resort sites, resort models, impacts of coastal tourism World Bank (1995) Pacific Islands Economies: detailed description of off-shore and near- overfishing Sustainable Development of shore fisheries in Pacific Islands including Fisheries policy recommendations M. G. Wright An Economic Analysis of Coral calculation of the costs and benefits of coral general (1994) Reef Protection in Negril, reef protection using CVM and travel cost Jamaica methods 91 Appendices Appendix 2: Assumptions for Yields, Costs, Income and Net Benefits etc. in Reefs of Various Quality effort yield value opp.cost other total total net yield net income net income Rp. net yield labour costs costs benefit income units man/vear mt/km2fyr US$/km2/yr (in 1000US$) kg/man/day US$/manlyr. US$/man/daV Rp./manlyr A B C D E F G H I J K assumptions Ikg-USs [Rp.2000/d) iqp.6~ooor) 0 + E C - F 10008A/3001 1000*(C-E)IA 1/300 J-2,200 prestine reef with reserve area 0.0 0.00 0.00 0.00 0.00 0.00 0.0 0.0 0 0.00 0 5.0 22.50 .22.50 1.36 0.14 1.50 21.0 15.00 4473 14.91 32,800 10.0 25.00 25.00 2.73 0.27 3.00 22.0 8.33 2473 8.24 18,133 15.0 27.50 27.50 4.09 0.41 4.50 23.0 6.11 1806 6.02 13,244 MSY 2 :30.00 : $00 5.45 0.5 80ø 24.. 147 4... ....00 30.0 25.00 25.00 8.18 0.82 9.00 16.0 2.78 806 2.69 5,911 40.0 20.00 20.00 10.91 1.09 12.00 8.0 1.67 473 1.58 3,467 QpaessØ4 ó 1 3.64 6 15,0 . .2 273 .. 2,000 0.0 0100 0.00 21.82 218 24.00 -240 0.00 -27 . -0.09 . -200 in tact reef 0.0 0.00 0.00 0.00 0.00 0.00 0.0 0.0 0 0.00 0 2.5 11.25 11.25 0.68 0.07 0.75 10.5 15.00 4473 14.91 32,800 5.0 12.50 12.50 1.36 0.14 1.50 11.0 8.33 2473 8.24 18,133 MSY ..1 15.00 15,00 2,73 0.7 301. 0 4.4 t0. 15.0 12.50 12.50 4.09 0.41 4 50 8.0 2.78 806 2.69 5,911 20.0 10.00 10.00 5 45 0.55 6.00 4.0 1.67 473 1 58 3.467 opn ces 5& 7.56 7.$0 8.82 o0*8 7*C CA 0 AO2%C,% 30.0 5.00 5.00 8.18 0.82 9.00 -4.0 0.56 139 0.46 1,022 40,0 0.00 0.00 10.91 1.09 12.00 -12.0 0.00 -27 -0.09 -200 25% destroyed 0.0 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0 0.00 0 2.5 8.68 8.68 0.68 0.07 0.75 7.9 11.57 3443 11.48 25,247 5.0 10.00 10.00 1.36 0.14 1 50 8.5 6.67 1973 6.58 14.467 7.5 1.25 n..2 2.05...2 2.25 . 5.0 147$ 4... .0,00 10.0 10.00 10.00 2.73 0.27 3.00 7.0 3.33 973 3.24 7.133 15.0 7.50 7.50 4.09 0.41 4.50 3.0 1.67 473 1.58 3,467 20.0 5.00 5.00 5.45 0.55 6.00 -1.0 0.83 223 0.74 1.633 25.0 2.50 2.50 6.82 0.68 7.50 -5.0 0.33 73 0.24 533 30.0 0.00 0.00 8.18 0.82 9.00 -9.0 0.00 -27 -0.09 -200 50% destroyed________ ______ 0.0 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0 0.00 0 2.5 6.25 6.25 0.68 0.07 0.75 5.5 8.33 2473 8.24 18,133 MSY.S: s.. *. 75 1Z : 16 . .0 4$4.$ý,0 7.5 6.25 6.25 2.05 0.20 2.25 4.0 2.78 806 2.69 5,911 10.0 5.00 5.00 2.73 0.27 3.00 2.0 1 67 473 1.58 3,467 open acess 12.5 27.7 3.75 3.41 0,34 $375 04 TL0 27l 04t 2*00 15.0 2.50 2.50 4.09 0.41 450 -2.0 0.56 139 0.46 1,022 20.0 0.00 0.00 5.45 0.55 6.00 -6.0 0.00 -27 -0.09 -200 60% destroyed 0.0 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0 0.00 0 2.5 5.25 5.25 0.68 0.07 0.75 4.5 7.00 2073 6.91 15.200 M.Y . .. 6. 09 ..011 2. 4 .0473 4 7 5.0 5 50 5 50 1 36 0.14 1 50 4.0 3.67 1073 3.58 7,867 7.5 4 25 4 25 2.05 0.20 2.25 2.0 1.89 539 1.80 3.956 open eccess 1o 0 $,00~ 3.00 Z7 233 0.2 2LOo 4oo t o7$ oat 2,000 15.0 0.50 0.50 4.09 0.41 4.50 -4.0 0.11 6 0.02 44 16.0 0.00 0.00 4.36 0.44 4.80 -4.8 0.00 -27 -0.09 -200 75% diestroyed________ ______ 0.0 0.00 0.00 0.00 0.00 0.00 0.0 0.00 0 0.00 0 ýMSY ........ ,5j ~ 0.5.60017$4~ 08 5.0 2.50 2.50 1.36 0.14 1.50 1.0 1.67 473 1.58 3.467 7 .5 1.25 1.25 2.05 0.20 2.25 -1.0 0.56 139 0.46 1,022 10.0 0.00 0.00 2.73 0.27 3.00 -3.0 0.00 -27 -0.09 -200 92 Есопозпiс Analysis of Indonesian Сога1 Reefs Anuendix 3 Destruction of согаl reefs апд its functions дие to explosive fгshing рег km2 (1000 US;••); (Scenario: LOц1F va1.u�) сыа+ сыа+ eoaaW гагw ? рГои:., .ацгк.:.:оаооR. ;.Лег.: угои borпb оеМг оооогг. пеt рль omer оо[юп. м[ го[геw ralw мt iyp.. .. двпгис nalюtr рыеспоп [аи9п :r�йyqr{:г�е4Чi�� -�еоц:� г�'� :� гоvепив соггк сапs cost rswnw nюnw сок0 соп reMnua of rotsг юцоl °агу ' � .оп v�aW гипслоп potvиlai : Sсц�,.::: � j�qt;::� ::цррУ: �рд�рр: аа:г ыап tУап иоаьа olast одw odиrr Ueou т геп hsharv соатl ог сегriвг Г0�`wa �`��: swtrn. :;p,�i�: i%г гх1 txt txt �иsЛегr�: iiafYi+g.��:�Ëц[лeF я�у ьампg ьzмпу мsму гыапl мггапg пц,аrv nsмg iоаип rnгrrv w.[нап oronc. oomeat гг�У .�,.. ..� .__ .. . . . .. . . д В С D :::::Е:�...: :::F.::.:::.:G... ::.],[..., � : r L м и •• о 0 р 5 г .....и.... огаовтаqе •о. ryд[nюns roп 8 оеп оег rr r�+ tиss[ rsnмs• мпиr dna• г.оь г.дшы• п t50 C�t с�Б бй] 07и 065 й55 Ьй0 4г7 7'v5 и•7�: м.,; 25а ]0 fcL вдТвм г:у. tOG16 +?Jп +Ой% г50 й.3 : 1 12. йCti J�К� О Gй GJO йG +5W J.' 7Э [:GO i:0 й0 йJ . б>Е 5]ъ +ir)4 iй�e 756 G.7 _ 7 г2. . 5° й 10 й Е5 4 5: а[ i:, й+О 1•й1 а а.а д а9 й G й: 1: 0 �i.7 . 75Эr. 654 +07i. Gi г: о о.Э . 12.' S�й С1 3G G 65 G 55 5 6 5 10 0 03 й 9з а 08 ' б9 0 CI 0 3 1; 0 -0.7 .� :3 # .'В4Ь 100ч6 J% i5 о G.3 ? 7 12. а ii 0 3G 0 i5 0 5; 1? а 65 G ОВ 0 85 Э•2 Е В7 J 0 о з 12 о •S, . )Oie '�)'в. Эз% йi г5 О 0.3 : 7 12. а:�) 7 зй G 65 G 5i . 3 20 G Од J�б 5 3д i йб О 2 О 3 12 О •% . ]B�rt ЕЭУ В3% •5�! г5 0 0 З : 7 72. 1', J Зо 0 65 : 3 3!; 0 G7 й 68 3 OJ : 25 0 5 о З 12 0 -7, r Е а5+в 5:% •7% й% t5о 0З :7 12. 110 й30 0б: J5; +б З10 йOf 0ЕО :6А аaq 0В GЗ 120 -1� � + 51% аЭв, д7% о% t5 О 0.3 : 7 12 2 д5 0 ЗО G Е5 0 55 [ а 2 8i G й5 G 52 _ 28 7 бз 1 0 �] З 72 0 �4. . ЬО'v sJт 5]% J4 [5 о 0.7 � 7 12. 2 ц1 0 з0 С1 ё5 0 55 J 9 2 s0 0 А7 0 ал 1 Э: : д2 + 3 й З 12 0 -!о и Ед�гь 37А, s7% �% t5 D 0.3 27 12. [ Э5 й]О й Е5 О 55 0 i 1 9: О Оа 0 75 1 56 : 01 1 6 •� З 12 0 •14. . 75! 254 3з% йi 75 О О.] ; 7 14. t;й G �0 0 Е5 G;5 0 й 1 iG 0 G3 0.7 7:0 �:С1 1 Э J 7 12 0 •i9, + 'S9с ::гв 73i й% г5 О Q3 12 + 5С• 0 ЗО 0 й5 0:5 0 0 1 50 G й7 0 27 + 2й 7?0 1 Э й З 12 0 -73, . 7s+r ::. зз% о% +s c о з 2 7 12 7:о о зо o ds O ss О о 1 5о й йз о.7 1 2о 7 zo + ч о э 12 о •1д , г7 7s� гsа 7з% оь 1so Оз :7 1г. 1so Ози йds oss оо 15о ой3 о:' 12о +zo +ч йз 1zo -1�о . 7s�. а+ь ззм й+ь 1sa О� 27 12. ,so Озо oфlosrves {USS 1.0 for beer botUe.s¢ед bomb; 1 bomb рег дау dunng ЭОО dyas); о.е� are ottler costs of Wast fishinp (Rp.4800 рег дау рег boat (riю реорlе); ЭОр days а уеаг); o.sd is opportunRy costs о( Wbour (2 реорlе; Rp. 2000; 300 дау5); д.ао is value af укЮ (гогг[ remmning fishery (USS 1 рег kg; угеlд coпesponds to the opGmallevel оГ еЯоrt as funcii0n of reef-desfructюn); о.71 аге other cost5 of fisПinp (see above), dependmg here оп optimallevel of еЯоR; г.о5 [s opportunity cost5 of labour (Rp. 2000 рег дау; 300 days; number о( реорlе is optlmal 1еиН о[ eRort as (ипсдоп of destrudion); 2s.a7 NPV of coastal рго[есЬоп function (д. teM for assumptюns); з.ао NPV of tounsm protecЬon functlon 1п сипепс scenano (cf. te1R for a5sumption5): ' NPV +s Wken окг 25 years; dlscount rate = ОСС = 10%; 1 US$ ts 2,200 Rp. 93 Appendices AnDendix 4 Destruction of согаl гeefs and its functions дие to eпplosive fishing рег km2 (1000 USS'е); (Scenario: 'H1GH' value) cwar corsi coasW Ч+пге ..аювs:..:рlпвr..:ооеаг: ;',YNT:: цои ооте огмг оо0огг. ме qгоя окnег оооогг, мг мегеvе v>rw valwыos мt ,EMt;:L�fV►. aaslruc haMrr огоиееап +ovum :tMlМ1Г: ��САв73 :::: Co7i7' t! .� гемпи сот cosa cort геюпие геvегим еока eosl геvепие ot гогМ loss W геrвмМ ;:✓>t';t0[>rC: . . . _ . . of tоиц7 юп умiа гипсом aoaneai г;wт,.::::.пiiс.г::::иёаак: вщйtд' wst ыаас ыак гаеоиг ыак агпм оииг utwv ог na+ пгмгr coastai ��мг :га4к. �г3it�t'iг? 1х1 t%i ia,t г%г �'ns{idгiP �'RiHtqrг-.Ёаик.ti Я'stюпг. евгчпq +unпq naыng lыатр nsвпу +�гмrv мвмпу югмп ьвг.гv w.ыаsг огоас. ьамгу �:гр��"Ьiji� А 8 С 0 ::::Е::г:�:г::.С:г:i::г�g:�: Б:г�,r г J в L М N О Р о R 5 Т Ч ;;iгjil��;: ............ . .... . .. ._.... � ... . .. рrеипгвре lorfitid.Wпs.::::: ......а . .::::....... msr 6 Ьеп оег п fo• Мьs7 fishers• вппид аке• гоv Ьgшеа• ...:........ 150 03 FГ�S б00 030 йL5 й;5 i0J G7+ tОч иС•о гл-.7 55G0 5070 EF.u woF•И �Ор� ��:4Ъ +х74в f50 д.7 :7 17. :.GG OйG йСА йi,rй 4J 15й5 ):+ '+7 +:Gй +:" •:С •iG . 51 974 tйGэy 505ь 750 0.] :7 72 ..,, й]й йiS 4:5 л 55. CrG +'й7 лаа йа9 Gй i79 720 •34. е г5% 554 7Сй% J% i5 о• G 7 : 7 12 `, +G 0 1G G 65 й 55 3 6 i+й 0 G9 4 9] л об i iB •� 4 55 9 12 0 -6G л ]7% 7ьвг +0016 09у 1Sa G.з :7 1i. ло: Озо oEi os5 з2 аь5 6Ge се5 7�2 г.ы с•и ;5е 7zo -41. , ЗО% 70'�. $ 3% G1в 75 Q 0.3 : 7 12. л.0 О ЗО й 65 G.5 . а гG G й8 О 76 3 76 Е 46 � 7 55 9 72 0 •6'г,,. . 38! i7'v. 67% О+а 75С 03 :7 72 ]:i йЮ GE5 655 :] 375 G07 ОбВ зСЮ °_5 +С•: 559 720 •77. . а s5Ъ 5:�b •3% й96 t5G Q3 :7 1� ?]G О30 йi5 G55 +В 370 006 О60 :63 asa 7ЕЗ 559 12О -7А л 53! sd�S Е7% Oi i5 0 0.3 2 7 t2. 2 85 0 ЭО G 6: 0 55 � � 2 85 G о5 G`.: . 2В 7 Ез 2: � 55 9 12 0 -6i. , В 60о. лОМ. 57% О% 75 О 0 3 . +2 7+0 0 70 й Е: i• 55 G Э 2 60 0 й4 п лл 1 у2 7 82 :8 5 :5 9 12.0 �57. л э ЕБ+И 379ь � 74h 0# 75 С о.3 2 7 72. + Э5 д ЗО й д5 G 55 G 5 1 95 4 0� � 35 + 5n : й1 ц 6 55 9 720 •tDR . гч 75i. :5+в 1]% 0% 75 0 0 7 2 12. +`Л 0]0 0 Е5 4 55 0 + 5й G 03 G 27 20 7:0 •И 7 ,5 9 12 0 •=07•4 л 7�а, г��в 73% д+6 i5 G 0 5 . 12. 7 50 О 30 O b5 й 55 0 0 + 5й G 03 O i+ 1 29 1 20 л0 7 55 9 12 0•iQT.4 w г г )5+ь. :54 1зi. GлF. 75 О О.з 2 12.' + 5•i 0 70 0 65 0 55 4 0 7 50 G 03 С 27 + 2гу 7 20 а0 7 55 9 72о •2D714 , 7;4 :i'е 73% 4% 75 6 0] . 12. + 5й J]0 0 65 0 55 G 0 +:й G 03 0 27 7:G + 20 а0 7 's5 9 72 С1 -3р7 .. 754. :54. 77% й+Ь t5 О 0.7 : 7 12. г 50 0 34 9 65 0 i5 J 0 7;0 0 03 0 27 + 20 + 2й �О 7 ;5 9 12 О+iD7.4 и 75% :54 33+h б'+h 75 О О] 2 7 12. 1 5G G 7й 0 65 4 55 0 4 1:0 G 07 0 27 +:0 +.0 М 1 55 9 72 о•707.4 л ;3`а :54 ЗЗ% �)4. 750 0] 27 12� +:G G3G GE5 055 йG 7°0 003 027 720 �ьй лй7 55д 720 .i07,4 , ,5х :4i 37% �)4 75а о.з 27 72f +5й Ози 9Е5 о55 йо +5о о0э о7% ,ю +:й sG7 5s9 ,2о •:р7л ,�а '� г, .5Ъ з7% �,и. 75 о о.з z 7 г2 7 5;, 0 7и о Е5 5s о:� + в0 о а7 о г 1.о :о ло 7 55 9 ,. й•707.4 . '.54 :: t ЗЭ% �ek 75 0 0. ] 2 7 12. г`.. С� з0 О Е5 й 55 O G г 50 �) 07 0:7 , 7G +:G oJ 7 55 9 12 0 •70'7.4 ,, 7о +54, 7.R 7?! й% 750 д7 27 72 +:0 G70 ОЕ5 0;°, OG 150 003 027 7Ю .'й W7 .55 7:0 •т07,4 ,, , _;че 77q, �.•лв 756 0� 2 7 17 1',й о з7 й Е5 G 55 G G 7 50 й й7 0 27 1 20 + 2G л0 i 55 9 12 0 •iQ7•4 . •94 ::Ъ 3]% Q% 75 С G 3 : 7 12 + дJ о 3G й Е: С• 55 й о 7 5G й W 0 27 7 20 г:0 s0 7 55 9 12 0.7р7.4 , . 2:+ь. 77ti G% 15С а7 :7 12 +5 03G ОЕ5 955 д0 15й йG] 027 +i0 +.`0 ар7 559 120 •30'*4 ., :л �;W, :5% 7з'7Ь vi 7S0 0.3 27 12 `А ОЗО ОЕ5 GO +5J й07 0: г'.0 +:0 �07 559 120 •7Р74 75�•ы 2;! 3]% о% 7Et0 д Э :..7 71 г:й й з0 G Е5 й 55 G 0 + 5й и 05 q�7 7 7о г 7й s0 7 55 9 72 о•тоt ..го........ ., г�;.a•• г .а� 7 .ь га О + а • аае ' ts.oo is таютит sustaы7aЫe yield in USS (7kp = 1USS); o.z7 аге aher costs of fistыng (nets: out-rigger boats (w/o motor), nets, etc.): х.7з is opportundy eosts of labour (10 реорlе; Rp. 2000 рег дау; 30D days); ь.оо is value of Dlaц reW N� 0.61 рег kg) апд 30kp рег дау (ог 300 days; о.ю is total соцs of e7Фlosrves (US$ 1.0 for Ьеег bottle-s¢ед bomb; 1 bomb рег дау tluring 3D0 dyas); o.es аге other гдsts af Ыast fishing (Rp.4B00 рег дау раг Doat (tию реорlе); 300 days а уеаг); o.ss i5 opportunRy еоцs о( Wbaп (2 Deople. Rp. 2000; 300 days); ь.оо is value о( yield Тгот remairnng fishery (USS 1 рег kg; yield сопе5ропдs to the opt6na11eve1 of effort as iunction of reef-0estruction); от аге other costs of fishing (see above), dependmg here оп optimallevel of eRort; ,.os i5 opportunrty costs of labour (fгр. 200D рег дау; 300 дау5; number of реорlе �s optimallevel of elfort as fundton of de5tгuction); sю.0о NW of coastal prote0tion function (cf. text for assumption5); sоэ.оо NPV of tourism protectwn fur7ct,on и сипепС scer7ano (cf. text for assumpUons): ' NРц is Caken over 25 years; дiscounC rate = ОСС = 10%; 1 USS is 2,200 Rp. 94 Economic Analysis of Indonesian Сога1 Reefs . Apaendix 5 Destruction of coral reefs and its functions дие to sma11 scale poison fishing per km2 (1000 US$""); (Scenarlo: some tourlsm otentlal) савl еоввUl lиtигв .:!yiayj(;"г";:911и�,;:;?А ' f ОгоЧ еvвпlдв оtПп о0Роп пвг угои otMr opport, nп ппгаvвпие r°!ие пвt !у1':;;i,i�"V,:! угоеа 9rose 1i�%4у:: .:. ad - �. . п..е rвlивlои оtМгеояs Wо9п. :. г.ие., с�.ил•с, !в„пи гwепяв еопs u+n гnм.в гоп, гоиа ет! •е.м„е .. гипе °ав! �в.мае оггои! ,.:е°г.! ге.еп.^SГtohS�'' -в•�еп;;е ге�:е�ив :.`itif:io/i7': � вhвW гм.•61.г.в :w.ы 1дМtlу WЧ г .�, 1..':��г• в.,вt виt. War � wгвм К'и• Рымп иМи� ро�вr• 01М� о1пв� 1вр°�.� о1�е11 гИвn tOllrв� 411о.п11 lивгвv. У. й'цпG аовlгв[Сп у вп в г л w.ге.. тте: l�аь.,, w,ро:вт� ..в ! гn ьу..е�� 1,h1 !•• гаг i!i 'сг4г г' funпr Грм�.� 1Фе11 Чвтпр ым.д ьеn�пq гo-о�вг ьу,иJ nепвп ьп,п 1ал Lrn ьне�ил� •ба i, nб�i в о F г 0 � в t м и О v г� и г н U гЧ й 1 рге.емвgе гогluпcNvns rasl 6 бел рег уг /ог Екrп�п hsг•ers' яппивг двге• по� hy„res' вппивг sинаило/е hsnery двге' у.е� 16.D 0Э 3.7 s. 160 о7 об 24 •+в! 80 Ог г2 н0и м•а OG а05 Ег0 N•OV•Н 5о 1JC� ОВ 2г vew•rr уг г qЪ ,Фiг ,6i�°м 10G+ � ц . уг г ьо'ь '0+ ,ог�'е 04 150 D 27.у у ,ьо 41 ОЬ 2а ,f6 60 Ог i2 36 г5•f 4�: д5 ,t9 �1•1 5•:� +,7 Ов 2� 5.1 чг . s"•,. rл�.. ,on� оч, +so nз гт;� •}1 оо оо оо оо оо ь�з ог гг эа зг ог, а; ,ао .з7.в sгз +до оа тг s.ь r, ��аг. аае lао; опг. +во л.7 �.� •f .;.ij оо оо ое ао on ьэ ог :� э? эз ог.� as +то •�1.Q 5о !+п ое iг 1g•у ,,, ° аг:, as•. ,оом, а't. ,бо о.з 2�?�4,р оо ео оо ос оо ьь ог ;7 аг 9� oi в5 ,1о �12.3 5о !до ов 1г 16.6 rr '�•i°е во�. lОдч 0"г 1S0 D9 2J;�1 А о0 Оо 0о пб 0о 69 07 7г а; д5 Ob а; 170 •170 i0 ltu J8 i. 1 6 у, � аtм дд°n ,оо-а о4, +50 Оэ Уг 1 i$ оо оо оо оо оп 7г ог гг ав 4в ог� в5 ,ас •11.7 5n +д0 ne 2г t6.5 Уг а е�ь s• г.. г оо 4 о � + в.о л. а г. т•� �� о о е�з а а о о о а г ь о 2 :: s! s! о о д 5 , г о л+, а s п ,+ о о в г г t s а ,., и.+�1•.в ва�. ,wеь ow. ,во о.3 2.1s;iй:A оо оо оо од оп гв ог гг :а s� оо аь ,га 1t1 so ,ао ов аг 166 гг � z�з.. �s� ,4Gм о�, tiso os z.г S� оо ео оо ос оо е+ ог :г sn :• ог. ds ,го +ов ьй ,да оа аг i. уг ri� 3rw 5ь'+ �i�J; G'е 750 Dэ 2.7 � �з 00 Од 00 00 ОП Вд ог i7 бri 5.• Ре� 45 t74 •105 54 �д�:� ОВ г' 166 гггг з°^.. ьа� !ео'е о�! +во nз iт5f ;fl оо оо Оо оо оо ег о7 г7 8э Б'л 00 45 ,so •+д.г 5о l+�i пв гг 9 уг': ЗЭ°п 6J`s ,U•.1•ь о't гЕ0 О.З 2.)���iA Go 00 о0 OG Оп 90 U2 ;'[ 66 Ьб Ог• 4`. 1г0 В.В 5�i !!��• пд 't' 1 5 ,.г г; згп: ы•м +еоп о�, iso os s.г д� � оо оо оо ос оо вэ ог гг Бе ь•э ос +s ,го •s.в sr.� ++с� ое г� +s.ь У, г, эом ьа9. ,enw. ом. +5о оэ s.7 г>1 rtl до оо од од да вв ог га гг гг ос а: +гс •9.э so ,ео оь г� 55 rr гг ia�, вв•м +ио�, о�. ,во о.3 г.г ); ;� оо оо оо ое оо ээ оа а: гs гs ос� де ,:д •8.о so ,�. ав г• 7ss У,гь zrw• 5е+. ,од^° ow. +Б.о о.3 2.г���;Я оо оа оо оо оо !ог ог гг гв га ос as гго а.+ 5о !�о ов i� 16.5 г, !�• гq� го,, ,ог;�ь от, iSO оз гг 372:б оо оо оа оо ог +о6 oz iг ь! а! ос� �ь +та в.а so +г�� ае г• + ь r, ге гз•. гr>. ioo-4 о; +ьо оэ хг 4� оо оо оо оо ое ,ое ог га ед е� ос аь ио �в, ьг, !зо ne а• 15.5 у, rq ii°е г+а t00и. о°и 790 о] 2.7 � 00 09 0о 0о до t17 02 г2 вг 9г GG а5 12G .7.8 ;G +гп G8 2� 1 rr :�г го°, гь�. ,оо�, о°ь ,ьо оа 2.г f оо оо оо оо о�� ,+а о2 :г эi� s�� ос� es +то 7.6 5о ,+с� ое zг Б•Б Уг:г +a-t ге> ,оо°� о�, +5о оз г.г; )i:15 оа оо оо ос� оо +,г ог гг ээ ч:, ос• а; +:гз г.2 sо ,�о га г• is �г г: +r-ь вг,t +оо•., о�ь +5о оэ х.г >��;� ди со оо ос ог.г +го оа гг чь sc ос� а: +an •e.s �а ,аг, ое z• +ьь „;, ,�ч� аа•н ,оо.. о�. ,ьо оз 2.'г`к;S�лб оо до оо оа о,, ,гз ог гг ч? s4 оа as +ао 9.6 sa l��� оь r� t '` �Ог OG а; +2г ,д� ., г+ ,зи. еа� lпам ои +йо оз 2г .��ip оо оо оо оо дгз ,ге оа :z ,о: � •Б,з so з оа г7 iбб У• гь ,г�, аьw ,оо°ь о•е +в,о д.э г,7" �fi оо оо оо ое оо +2ч oz гг ,оь !оь оа дь +го •s,o so ++о ое 2• п°г си..т .w• Чн t!о гЕ•• " , ь о�s maximum sustainaЫe yield in mvkm2/уг (reertlat 20mt/km2/yr апд о.з аге olher соыь of Пshиg (nets; ouc-rigger boats (w/о motor), nets, elc ) i.� is oppoгlunity costs о1lаЬоиг (10 реорlе; Rp. 2000 рег дау; 3о0 дауь); ! ь.а is 2 mt/Кт2 of catcheaЫe Ыomass of groupers wilh рдсе US$7 (ог live grouper апд US$1 (ог деад grouper апд 33°� mortalily rate o.z is total costs of cyanide (US$ 0.1 (ог cyanide рег grouper апд 2 mt of grouper with average slza 1 kg); о.а аге olher costs оТ ро,ьоп Пshing (5 out-board motor boats with each аппиаl casts о( US$ 300) х.л is opportunity costs о(1аЬоиг (5 реорlе; US$ 480 each); в.о 1ь net revenue Кот fishery in рапlу destroyed reef with в реорlе (the optimallevel of еПогt in non-destroyed гее�, о.о NPV of coastal proteclion tunc0on (cf. text �ог assumptlons); ао.ь NPV of tourism pratection function in current scenario (с(. teM for assumplions); ь.о is gross revenue of hook•and�llne бshery (1 mt/km2 of susf. grouper yield with pricea аа above апд the ьате 33°� mortality rate) , е.о is gross revenue о( other fishery (14/15 о( погтаl yield; the rest is groupers, treated separatety) о.е аге the other costs (Rp. 180,000 рег уеаг) s.� is oppodunilу costs for 10 persons (Rp. 2000 рег дау; 300 days а уеаг) " NPV is taken over 25 years; discount rate = ОСС = 10°h; 1 US$ is 2,200 Rp. 95 Appendices AR.Re_ndix 6 Destruction of coral reefs and its functions due to large scale poison fishing (in Million US$) us th, gross latiour other cyanide SCUBA side- 't " val loss labour 0 her value loss 9 ot r 0 revenue costs costs income X avenue costs costs costs costs payments loss Of t .... . f tourist poison poison poison poison poison cyanicle coastal hook8d poison poterm "k; . . . . . . . . . . . . fishing fishino fishing fishinq fishing tishing ZI.: Protec. live-fish live-fish live-fish fishermen 0 E K L PA 14 C. IR cost benenfif Der year for poison fishers TfAd A npv figures Tam annual sus r. fishery da ra Total - Tom ,ea, I 1 '0 0 34 1 2150 " C' so 100 a 323.6 -161 r 75 0 170 22 5 2.7 X-C-0 V, 10 o 1,30 739 0.0 64,9 75 0 17.0 SO 0 34 1 -75 0 9.0 5 Ms 0.0 -295 2 1500 34 1 25.0 -'0 o 100 73.9 00 ISO 55.19 75 0 170 22.5 36.5 Oo W.s 3 150 0 24 1 25 0 0 cl 0 100 739 00 2 7 0 46_ 75 0 17.0 22 S 35.5 0.0 '11.5 4 1500 34 1 25.0 20 50 100 7a4l 0. 0 360 3S.0 75 0 170 22.5 3516 0.0 -2.5 170 22 5 35.6 2.7 . 68.2 '_.0 00 0 0 0 a 00 0 0 0.0 J.0 36.0 .36.0 71 0 1:10 0 0 00 00 00 00 0.0 0 0 36.0 -39,0 75 0 17.0 22 5 36.5 2.7 U.7 0 C. 00 00 0 0 00 0.0 0.0 00 360 . 3SM 75.0 170 22 5 35.5 2.7 68.7 00 00 00 0 0 1:1 0 0.0 Q. 0 00 360 -no 75 i 17.0 22.5 35.5 2.7 68.7 013 -30 00 ,, ri 00 00 0.0 1") 0 36.0 -36.0 75.0 17 0 22 5 35.5 2.7 98.7 "1 0 0 0 0 0 00 0.0 013 36.0 -38.0 750 170 22 5 3515 7 68.7 00 00 00 0.0 00 36.0 -36.0 - 0 17 0 22 5 36. 5 2 7 as 7 0 0 00 00 GO 00 00 0.0 .30 360 -38.0 75.0 170 22.5 351153 2.7 68.7 ri 0 Co 00 00 00 -30 00 00 36.0 -36.(3 750 17.0 22.5 35.6 2.7 68'.7 00 010 00 00 G 0 ri 0 0.0 00 36.0 -36.0 750 170 22.5 "A 27 641.7 V, 15 00 0 0 00 00 -30 00 0.0 00 360 -36M 75.0 17 0 22.5 3315 7 0&7 16 0.0 -)0 0.0 00 ri a 00 0.0 0.0 36.0 -3fi,o 750 17.0 22.5 $5.5 2.7 68.7 1 C. 0 00 00 00 00 00 ao 00 360 -3$.() 75.0 17.0 22.5 3515 2.7 68.7 IS 60 00 00 00 0 0 00 0-0 0.0 36.0 _34,Q 750 170 22.5 35.5 2.7 80 00 00 00 00 0 0 00. 0.0 00 36.0 ..36J3 75.0 17.0 22.5 35.5 2.7 M7 36,0 750 17.0 22.5 35.6 C. 0 00 00 00 C, 0 00 0.0 00 36.0 2.7 60.7 21 0 0 G. 0 00 00 00 00 0.0 G 0 36.0' -3e,cl 750 17.0 22.5 35.5 2.7 IM. 2 0 0 00 0 0 130 0 0 00 0.0 130 36.0 _S8.0 75 0 170 22 5 35.5 2.7 60,7 3 C- 00 ri 0 00 0 0 0.0 00 -Io 36.0 _36.Q 75 0 170 22.5 25.5 2. 7 687 3 C. 00 00 '-'0 00 00 010 00 360 -36.0 75 0 170 22 5 MISS 27 68.7 C, 0 3 0 00 00 00 aG G a 360 -36.0 '5 0 170 22 5 M5 2 . 7 M 71 as. NFv I 475,5LTOP.Il 79.ff fi. 31 jr..8 31.1 2.34;31 0.01 230.21 -".,ol 62o.rs] 1`547f 20A.2 :321.8 ir..ij 361.7 150.0 is annual poison fishery yield in millionUS$; 3 mt per boat of which 2 mt arrives alive; US$151kg-, 10 months, 500 operations) 34.1 is annual cost of ]about (Rp. 5000 per caught live fish; av. weight 1 kg, 3 Int per trip of 20 fishermen; 10 months; 500 operations) 25.0 is annual other costs, such as depreciation boat, capital investment: fuel costs; food, etc. 2.0 is annual cost of cyanide: US$ O.Icyanidelgrouper; 4mt per boat-trip are sprayed; 10 months: 500 operations; 1grouper is 1 kg. 5.0 SCUBA costs per year, based on maintenance and capital costs of compressor plus tanks; 10.0 side-payments to individuals (cyanide fishing is illegal) 0.0 present value of coastal zone destruction 323.6 present value of total tourism potential (5% high (PV:$ 800,000/km21; 15% modest (PV.$ 3,000/km2): 80% no tourism potential) 75.0 is annual yield of sustainable hook&line liv"rouper fishery; prodcutivity is half of that of poison fishery) 17.0 is annual cost of iabour (prodcutivity is half of that of poison fishery; payments per fish are equal) 22.5 is annual other costs (same as poison fishery, except lower fuel costs per year due to absence of compressors for SCUBA) 2.7 is annual labour income of poison fishermen after cyanide fishing has ceased (10,000 men; Rp. 2,000/day; 300 dayslyr) NPV is taken over 25 years with discount rate 10% (OCC in Indonesia) 96 Economic Analysis of Indonesian Coral Reefs Appendix 7: Destruction of Coral Reefs and its Functions due to Coral Mining ('LOW value scenario; in 1000 US$; values per km2 of reef) coral coral coasl future muddy gross cos other opportu village net net net increm. value value extern. net fetrcishr rtc tourism fishery revenue wodcosts of costs nity benefits of revenue revenue revenue loss of loss of loss of Costs value yield funct potent. yield of coral bribes for cost coral sustain remain, muddy fishery coastal tourist wood Coral on (%) %) (%) (%) mining iiners labour mining fishery fishery fishery yield protec. potent inputs mining A B C D E F G H I J F-G-H-I-J H I J J-H-I K L 0 val./yz 49.09 15.00 2.82 033 3.75 49.09 10.91 8.73 2.18 16.36 25.4 3 10.91 yr. c 0.0 1.0 1.0 1.0 0. 0.0 0.0 0.0 0.0 0.0 0.0 15.0 15.0 0.0 0.0 0.0 0.0 0.00 yr. 1 0.1 0.8 1.0 0.5 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 12.0 0.0 3.0 0.0 0.2 10.91 5.6 yr. 2 0.2 0.7 1.0 0.0 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 10.5 0.0 4.5 0.0 0.3 10.91 3.9 yr. 3 0.3 0.6 1.0 0.0 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 9.0 0.0 6.0 0.0 0.3 10.91 2.4 yr. 4 0.4 0.5 1.0 0.0 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 7-5 0.0 7.5 0.0 0.3 10.91 0.9 yr. 5 0.5 0.4 1.0 0.0 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 6.0 0.0 9.0 0.0 0.3 10.91 -0.6 yr. 6 0.6 0.3 0.8 0.0 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 45 0.0 10.5 0.6 0.3 10.91 -2.7 yr. ? 0.7 0.2 0.6 0.0 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 3.0 0.0 12.0 1.1 0.3 10.91 -4.7 yr. 8 0.8 0.1 0.4 0.0 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 1.5 0.0 13.5 1.7 0.3 10.91 -6.8 yr. 9 0.9 0.0 0.2 0.0 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 0.0 0.0 15.0 2.3 0.3 10.91 -8.9 yr. 10 1.0 0.0 0.0 0.0 0.0 49.1 10.9 8.7 2.2 16.4 10.9 15.0 0.0 0.0 15.0 2.8 0.3 10.91 -9.4 yr. 11 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 0.0 15.0 2.8 0.3 0.00 -18.2 yr. 12 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 0.0 15.0 2.8 0.3 0.00 -18.2 yr. 13 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 0.0 15.0 2.8 0.3 0.00 -18.2 yr. 14 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 0.0 15.0 2.8 0.3 0.00 -18.2 yr. 15 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 0.0 15.0 2.8 0.3 0.00 -18.2 yr 16 1.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 0.4 14.6 2.8 0.3 0.00 -17.8 yr 17 1.0 0.0 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 0.8 14.3 2.8 0.3 0.00 -17.4 yr. 18 1.0 0.0 0.0 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 1.1 13.9 2.8 0.3 0.00 -17.0 yr. 1 1.0 0.0 0.0 0.0 0.4 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 1.5 13.5 2.8 0.3 0.00 -16.7 yr. 2 1.0 0.0 0.0 0.0 0.5 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 1.9 13.1 2.8 0.3 0.00 -16.3 yr. 21 1.0 0.0 0.0 0.0 0.6 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 2.3 12.8 2.8 0.3 0.00 -15.9 yr. 2 1.0 0.0 0.0 0.0 0.7 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 2.6 12.4 2.8 0.3 0.00 -15-5 yr. 23 1.0 0.0 0.0 0.0 0.8 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 3.0 12.0 2.8 0.3 0.00 -15.2 yr. 24 1.0 0.0 0.0 0.0 0.9 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 3.4 11.6 2.8 0.3 0.00 -14.8 yr. 25 1.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 3.8 11.3 2.8 0.3 0.00 -14. yr. 26 1.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 3.8 11.3 2.8 0.3 0.00 -14.4 yr. 2 1.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 3.8 11.3 2.8 0.3 0.00 -14.4 yr 28 1.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 3.8 11.3 2.8 0.3 0.00 -14.4 yr 29 1.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 3.8 11.3 2.8 0.3 0.00 -14.4 yr. 30 1.01 0.0 0.0 0.0 110 0.0 0.0 0.0 0.0 0.0 0.0 15.0 0.0 3.8 11.3 . .00 -14.4 nt present value (NPV) from year 1 to 25: 301.6 67.0 53.6 13.4 100.5 67.0 136.2 40.0 2.6 93.6 12.0 2.9 67.0 - 97